[atlas:bill]

AN ACT Relating to water resource management and facilitating fishery protection and recovery; amending RCW 90.54.020, 90.54.180, 90.03.290, 43.20.230, 90.48.495, 90.46.005, 90.46.030, 90.46.040, 90.46.120, 90.46.130, 90.03.380, 90.42.080, 90.03.330, 90.03.015, 39.34.020, 90.03.386, 90.03.383, 90.44.050, 58.17.110, 19.27.097, 90.03.255, 90.44.055, 75.20.106, 77.15.300, 90.03.600, 43.21B.300, 90.08.040, 90.08.060, 90.03.070, 90.58.080, 43.99E.015, and 43.99E.030; reenacting and amending RCW 43.83B.300; adding new sections to chapter 43.83B RCW; adding new sections to chapter 70.119A RCW; adding a new section to chapter 58.17 RCW; adding a new section to chapter 35.21 RCW; adding a new section to chapter 35A.21 RCW; adding a new section to chapter 36.01 RCW; adding a new section to chapter 90.54 RCW; adding new sections to chapter 90.46 RCW; adding new sections to chapter 90.03 RCW; adding new sections to chapter 90.44 RCW; adding a new section to chapter 39.34 RCW; adding a new section to chapter 90.58 RCW; adding a new section to chapter 43.27A RCW; adding new sections to chapter 36.70A RCW; adding a new section to chapter 43.21C RCW; adding new sections to chapter 90.42 RCW; creating new sections; prescribing penalties; making an appropriation; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that numerous fish stocks of the state are being listed or are proposed to be listed as threatened or endangered under the federal endangered species act. The legislature further finds that existing state laws form a good foundation for the state to respond to the listings and proposed listings, but that various laws relating to water resources, land use, and fish protection and restoration must be strengthened to minimize the potential for federal preemption of state authority and autonomy regarding the management of the state's fisheries and water resources.

PART I

WATER CONSERVATION

Sec. 101. RCW 90.54.020 and 1997 c 442 s 201 are each amended to read as follows:

Utilization and management of the waters of the state shall be guided by the following general declaration of fundamentals:

(1) Uses of water for domestic, stock watering, industrial, commercial, agricultural, irrigation, hydroelectric power production, mining, fish and wildlife maintenance and enhancement, recreational, and thermal power production purposes, and preservation of environmental and aesthetic values, and all other uses compatible with the enjoyment of the public waters of the state, are declared to be beneficial.

(2) Allocation of waters among potential uses and users shall be based generally on the securing of the maximum net benefits for the people of the state. Maximum net benefits shall constitute total benefits less costs including opportunities lost.

(3) The quality of the natural environment shall be protected and, where possible, enhanced as follows:

(a) Perennial rivers and streams of the state shall be retained with base flows necessary to provide for preservation of wildlife, fish, scenic, aesthetic and other environmental values, and navigational values. Lakes and ponds shall be retained substantially in their natural condition. Withdrawals of water which would conflict therewith shall be authorized only in those situations where it is clear that overriding considerations of the public interest will be served.

(b) Waters of the state shall be of high quality. Regardless of the quality of the waters of the state, all wastes and other materials and substances proposed for entry into said waters shall be provided with all known, available, and reasonable methods of treatment prior to entry. Notwithstanding that standards of quality established for the waters of the state would not be violated, wastes and other materials and substances shall not be allowed to enter such waters which will reduce the existing quality thereof, except in those situations where it is clear that overriding considerations of the public interest will be served. Technology-based effluent limitations or standards for discharges for municipal water treatment plants located on the Chehalis, Columbia, Cowlitz, Lewis, or Skagit river shall be adjusted to reflect credit for substances removed from the plant intake water if:

(i) The municipality demonstrates that the intake water is drawn from the same body of water into which the discharge is made; and

(ii) The municipality demonstrates that no violation of receiving water quality standards or appreciable environmental degradation will result.

(4) The development of multipurpose water storage facilities shall be a high priority for programs of water allocation, planning, management, and efficiency. The department, other state agencies, and local governments, and planning units formed under ((~~section 107 or 108 of this act~~)) chapter 90.82 RCW shall evaluate the potential for the development of new storage projects and the benefits and effects of storage in reducing damage to stream banks and property, increasing the use of land, providing water for municipal, industrial, agricultural, power generation, and other beneficial uses, and improving stream flow regimes for fisheries and other instream uses.

(5) Adequate and safe supplies of water shall be preserved and protected in potable condition to satisfy human domestic needs.

(6) Multiple-purpose impoundment structures are to be preferred over single-purpose structures. Due regard shall be given to means and methods for protection of fishery resources in the planning for and construction of water impoundment structures and other artificial obstructions.

(7) Federal, state, and local governments, individuals, corporations, groups, and other entities shall ((~~be encouraged to~~)) carry out practices of conservation as they relate to the use of the waters of the state. In addition to traditional development approaches, improved water use efficiency and conservation, including reclaiming municipal and industrial effluent, shall be emphasized in the management of the state's water resources and ((~~in some cases~~)) will be a potential new source of water with which to meet future needs throughout the state. Where reclaimed water is a feasible replacement source of water in accordance with criteria adopted under section 206 of this act, it shall be used for nonpotable water uses in lieu of using potable water for those uses.

(8) Development of water supply systems, whether publicly or privately owned, which provide water to the public generally in regional areas within the state shall be encouraged. Development of water supply systems for multiple domestic use which will not serve the public generally shall be discouraged where water supplies are available from water systems serving the public.

(9) Full recognition shall be given in the administration of water allocation and use programs to the natural interrelationships of surface and ground waters.

(10) Expressions of the public interest will be sought at all stages of water planning and allocation discussions.

(11) Water management programs, including but not limited to, water quality, flood control, drainage, erosion control, and storm runoff are deemed to be in the public interest.

Sec. 102. RCW 90.54.180 and 1989 c 348 s 5 are each amended to read as follows:

Consistent with the fundamentals of water resource policy set forth in this chapter, state and local governments, individuals, corporations, groups, and other entities shall ((~~be encouraged to~~)) carry out water use efficiency and conservation programs and practices consistent with the following:

(1) Water efficiency and conservation programs ((~~should~~)) shall utilize an appropriate mix of economic incentives, cost share programs, regulatory programs, and technical and public information efforts. Programs which encourage voluntary participation are preferred.

(2) Increased water use efficiency ((~~should receive consideration as~~)) and conservation, including reclaiming municipal and industrial effluent shall be considered a potential source of water in state and local water resource planning processes. In determining the cost-effectiveness of alternative water sources, consideration should be given to the benefits of conservation, waste water recycling, and impoundment of waters.

(3) In determining the cost-effectiveness of alternative water sources, full consideration should be given to the benefits of storage which can reduce the damage to stream banks and property, increase the utilization of land, provide water for municipal, industrial, agricultural, and other beneficial uses, provide for the generation of electric power from renewable resources, and improve stream flow regimes for fishery and other instream uses.

(4) Entities receiving state financial assistance for construction of water source expansion or acquisition of new sources shall develop, and implement if cost-effective, a water use efficiency and conservation element of a water supply plan pursuant to RCW 43.20.230(1).

(5) State programs to improve water use efficiency ((~~should~~)) shall focus on those areas of the state in which water is overappropriated; areas that experience diminished stream flows or aquifer levels, including areas with declining fish stocks due to lack of stream flow; and areas where projected water needs, including those for instream flows, exceed available supplies.

(6) Existing and future generations of citizens of the state of Washington ((~~should~~)) must be made aware of the importance of the state's water resources and the need for wise and efficient use and development of this vital resource. In order to increase this awareness, state agencies ((~~should~~)) shall integrate public education on increasing water use efficiency into existing public information efforts. This effort shall be coordinated with other levels of government, including local governments and Indian tribes.

Sec. 103. RCW 90.03.290 and 1994 c 264 s 84 are each amended to read as follows:

(1) When an application complying with the provisions of this chapter and with the rules ((~~and regulations~~)) of the department has been filed, ((~~the same~~)) it shall be placed on record with the department((~~, and it shall be its duty to~~)). The department shall investigate the application, and determine what water, if any, is available for appropriation, and find and determine to what beneficial use or uses it can be applied.

(2) If it is proposed to appropriate water for irrigation purposes, the department shall investigate, determine, and find what lands are capable of irrigation by means of water found available for appropriation. If it is proposed to appropriate water for the purpose of power development, the department shall investigate, determine, and find whether the proposed development is likely to prove detrimental to the public interest, having in mind the highest feasible use of the waters belonging to the public.

(3) If the application does not contain, and the applicant does not promptly furnish sufficient information on which to base such findings, the department may issue a preliminary permit, for a period of not to exceed three years, requiring the applicant to make such surveys, investigations, studies, and progress reports, as in the opinion of the department may be necessary. If the applicant fails to comply with the conditions of the preliminary permit, it and the application or applications on which it is based shall be automatically canceled and the applicant so notified. If the holder of a preliminary permit shall, before its expiration, file with the department a verified report of expenditures made and work done under the preliminary permit, which, in the opinion of the department, establishes the good faith, intent and ability of the applicant to carry on the proposed development, the preliminary permit may, with the approval of the ((~~governor~~)) director, be extended, but not to exceed a maximum period of five years from the date of the issuance of the preliminary permit.

(4) The department shall make and file as part of the record in the matter, written findings of fact concerning all things investigated, and if it shall find that there is water available for appropriation for a beneficial use, and the appropriation thereof as proposed in the application will not impair existing rights or be detrimental to the public welfare, it shall issue a permit stating the amount of water to which the applicant shall be entitled and the beneficial use or uses to which it may be applied((~~: PROVIDED, That where~~)). If the water applied for is to be used for irrigation purposes, it shall become appurtenant only to such land as may be reclaimed thereby to the full extent of the soil for agricultural purposes. But where there is no unappropriated water in the proposed source of supply, or where the proposed use conflicts with existing rights, or threatens to prove detrimental to the public interest, having due regard to the highest feasible development of the use of the waters belonging to the public, it shall be the duty of the department to reject such application and to refuse to issue the permit asked for. The department may also reject the application and refuse to issue the permit if reliance on an alternative source of water, including, but not limited to, water that could be acquired through a change or transfer of an existing water right or use of a feasible source of reclaimed water, would better serve the public interest. If the permit is refused because of conflict with existing rights and such applicant shall acquire the same by purchase or condemnation under RCW 90.03.040, the department may thereupon grant such permit.

(5) Any application may be approved for a less amount of water than that applied for, if there exists substantial reason therefor, and in any event shall not be approved for more water than can be applied to beneficial use for the purposes named in the application. In determining whether or not a permit shall issue upon any application, it shall be the duty of the department to investigate all facts relevant and material to the application. After the department approves said application in whole or in part and before any permit shall be issued thereon to the applicant, such applicant shall pay the fee provided in RCW 90.03.470((~~: PROVIDED FURTHER, That in the event~~)). If a permit is issued by the department upon any application, it shall be its duty to notify the director of fish and wildlife of such issuance.

NEW SECTION. Sec. 104. A new section is added to chapter 43.83B RCW to read as follows:

(1) It is the intent of the legislature to provide moneys to the department of ecology for grants and loans to public bodies engaged in irrigation water supply for the purpose of improved drought preparedness. As used in this chapter, "drought preparedness" means the implementation of agricultural water supply conservation projects that:

(a) Are identified in approved water conservation plans;

(b) Mitigate the effects of future droughts on existing water uses in drought-prone areas;

(d) Produce increases in instream flows; and

(e) Are located in predominantly agricultural areas that have threatened or endangered species listed or proposed for listing under the federal endangered species act or that have salmonid stocks listed as critical or depressed under the state salmon and steelhead stock inventory.

(2) The department of ecology is authorized to make loans or grants, or combinations of loans and grants from drought preparedness funds when needed to implement agricultural water supply conservation or efficiency projects. For the purposes of this section, "drought preparedness funds" means funds appropriated from the state drought preparedness account created under section 1004 of this act. The department of ecology may make the loans or grants, or combinations of loans and grants as matching funds in any case where federal, local, or other funds have been made available on a matching basis. The department may make a loan of up to ninety percent of the total eligible project cost or combination loan and grant up to one hundred percent of the total single project cost. The grant portion of any single project shall not exceed twenty percent of the total project cost. No single entity shall receive more than ten percent of the total drought preparedness funds available.

(3) The following eligibility criteria must be met in order for an entity to apply for drought preparedness funds:

(a) The entity must be organized as a public body, capable of accepting and administering loans and grants;

(b) The entity must have a completed, approved water conservation plan that recommends the project or projects proposed for funding; and

(i) Has threatened or endangered fish species listed or proposed for listing under the federal endangered species act or depressed or critical stocks under the state salmon and steelhead stock assessment;

(ii) Has agriculture as its economic base; and

(iii) Is prone to drought conditions.

(4) The proposed project must result in at least a ten percent decrease in diversion from the applicable surface water source, and must increase the stream flow in the same surface water source. If the entity is served mainly by ground water, there must be at least a ten percent decrease in the instantaneous and annual amount withdrawn. There must be an increase in surface water sources in hydraulic continuity with the ground water source.

(5) Recipients of loans and grants under this section may retain and use conserved water under the following conditions:

(a) The person proposing the change or transfer must agree in writing to convey to the state of Washington at least one-half of the transferable net water savings for the purpose of establishing a trust water right under chapter 90.38 or 90.42 RCW as applicable. The proportion of water that must be conveyed to the state of Washington shall be equivalent to the ratio of the state or federal funding to the overall project cost, but in no case less than one-half of the net water savings. The person proposing to change or transfer and use the remaining water on additional or different lands may do so only under an approved change to the water right issued by the department of ecology under RCW 90.03.380. Reallocation and use of conserved water under this section shall not impair any existing water rights.

(b) The department of ecology may waive the requirement to convey a trust water right to the state only where there is no discernable public purpose to be benefited by establishment of a trust water right for those waters. In such case, in lieu of conveying a trust water right, the person proposing the conservation project must remit to the state treasurer a payment equal to the value of the proportion of the water right not conveyed to the state. The amount of this payment shall be determined by a licensed independent real estate appraiser selected by agreement of the department of ecology and the applicant. The basis of the appraisal shall be the value of the proportion of the conserved water not conveyed to the state in consideration of the economic value of water in the immediate area where the water right is used. The cost of the appraisal shall be shared equally by the department of ecology and the applicant. Any funds conveyed to the state under this section shall be deposited in the state stream flow restoration account established in section 1005 of this act for use in purchasing or leasing trust water rights.

NEW SECTION. Sec. 105. A new section is added to chapter 70.119A RCW to read as follows:

(1) Each public water system with fifteen or more service connections shall:

(a) Implement a water conservation program promotion targeted at system customers; and

(b) Implement other cost-effective water conservation measures identified in approved water conservation plans required under RCW 43.20.230.

(2) Public water systems with one thousand or more service connections shall:

(a) Implement a leak detection and repair program, and shall repair leaks if the system's unaccounted for water is ten percent or more of total system water usage;

(b) Conduct water audits to identify internal water distribution and associated opportunities for improved water use efficiency; and

(c) Utilize commodity-based water rates and not declining block rate structures. Commodity-based rate structures are based, at least in part, upon the volume of water used. Declining block rate structures separate consumption levels into two or more blocks, with rates per unit of water decreasing as the total volume of consumption by a customer increases.

(3) Public water systems that have completed a conservation plan within six years prior to the effective date of this section in accordance with the requirements of the department need not create a new plan, but shall address any of the above elements that have not been previously addressed in the next scheduled update of the water system plan and conservation plan.

Sec. 106. RCW 43.20.230 and 1993 sp.s. c 4 s 9 are each amended to read as follows:

Consistent with the water resource planning process of the department of ecology, the department of health shall:

(1) Develop ((procedures and guidelines relating to water use efficiency, as defined in section 4(3), chapter 348, Laws of 1989, to be included in the development and approval of cost-efficient water system plans required under RCW 43.20.050)) comprehensive water conservation planning requirements for public water systems based upon system size, to be included in water system plans and small water system management programs required under RCW 43.20.050. Conservation plans approved under this section shall meet the water conservation planning requirements of the department of ecology for the purposes of water right permit processing. As part of these comprehensive planning requirements water systems shall:

(a) Demonstrate compliance with the conservation requirements contained in section 113 of this act;

(b) Evaluate service meter installation;

(d) Evaluate development and implementation of a leak detection and repair program; and

(e) Utilize water use efficiency performance standards developed under section 113 of this act for conservation planning, water demand forecasting, and other water system planning purposes;

(2) Review and approve water conservation plans, and monitor plan implementation to ensure compliance with comprehensive conservation planning requirements under subsection (1) of this section;

(3) Develop criteria, with input from technical experts, with the objective of encouraging the cost-effective reuse of greywater and other water recycling practices, consistent with protection of public health and water quality;

((~~(3)~~)) (4) Provide advice and technical assistance upon request in the development of water use efficiency plans. This includes development of model landscape ordinances, assistance to public water systems and local governments regarding water conservation, and general public education on water conservation and efficiency; ((~~and~~

~~(4)~~)) (5) Provide advice and technical assistance on request for development of model conservation rate structures for public water systems((~~. Subsections (1), (2), and (3) of this section are subject to the availability of funding~~)); and

(6) Adopt rules as necessary through the state board of health to implement any provisions of this section.

NEW SECTION. Sec. 107. A new section is added to chapter 70.119A RCW to read as follows:

Public water systems with fifteen or more service connections shall collect monthly water use data from all water sources used to serve the system. Water use data collected under this section shall be submitted annually to the department in a form and manner prescribed by the department. Data collected under this section shall be coordinated with water use data collection requirements of the department of ecology.

NEW SECTION. Sec. 108. A new section is added to chapter 58.17 RCW to read as follows:

In determining whether a proposed short plat, short subdivision, or subdivision meets the requirements for potable water supplies as required under RCW 58.17.060 or 58.17.110, and otherwise serves the public use and interest, the city, town, or county shall require:

(1) Conformance to any water conservation ordinances or plans adopted by the city, town, or county;

(2) Utilization of water conservation measures consistent with any regional watershed plan adopted under chapter 90.82 RCW; and

(3) Utilization of reclaimed water where potable water is not required consistent with any local ordinance adopted on water reuse requirements.

NEW SECTION. Sec. 109. A new section is added to chapter 35.21 RCW to read as follows:

(1) Any city or town may adopt a water conservation program by ordinance or other legal authority. This includes ordinances to implement the provisions of any regional watershed plan adopted under chapter 90.82 RCW. Such a program may include the following requirements:

(a) Utilization of water conservation measures consistent with specific provisions of regional watershed plans adopted under chapter 90.82 RCW;

(b) Utilization of water conservation measures that may be in addition to those required by either the department of health or the department of ecology, including landscape irrigation requirements, public fixture retrofit and rebate programs, and commercial and industrial conservation programs; and

(2) The provisions of any water conservation program shall be implemented by the city or town through development of any comprehensive plan, development regulations, issuance of permits and other approvals, development of any sewerage and/or water general plan under RCW 36.94.030, operation of any sewerage or water systems under chapter 36.94 RCW, or as otherwise allowed by law.

NEW SECTION. Sec. 110. A new section is added to chapter 35A.21 RCW to read as follows:

(a) Utilization of water conservation measures consistent with specific provisions of regional watershed plans adopted under chapter 90.82 RCW;

NEW SECTION. Sec. 111. A new section is added to chapter 36.01 RCW to read as follows:

(1) Any county may adopt a water conservation program by ordinance or other legal authority. This includes ordinances to implement the provisions of any regional watershed plan adopted under chapter 90.82 RCW. Such a program may include the following requirements:

(a) Utilization of water conservation measures consistent with specific provisions of regional watershed plans adopted under chapter 90.82 RCW;

(2) The provisions of any water conservation program shall be implemented by the county through development of any comprehensive plan, development regulations, issuance of permits and other approvals, development of any sewerage and/or water general plan under RCW 36.94.030, operation of any sewerage or water systems under chapter 36.94 RCW, or as otherwise allowed by law.

Sec. 112. RCW 90.48.495 and 1989 c 348 s 10 are each amended to read as follows:

The department of ecology shall require sewer plans that propose an expansion of treatment capacity to include a discussion of water conservation measures considered or underway and their anticipated impact on public sewer service. The plans shall evaluate the cost-effectiveness of funding water conservation programs as an alternative to expanding sewage treatment capacity.

NEW SECTION. Sec. 113. A new section is added to chapter 90.54 RCW to read as follows:

(1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Reasonable and beneficial use" means the minimum amount of water necessary to carry out the intended purpose of water use without waste. It may include a reasonable amount of water lost due to normal conveyance and application losses.

(b) "Water duty" means that measure of water, which by careful management and use, without waste, is reasonably required for the use or proposed use.

(2) The department in consultation with the department of health shall adopt rules establishing water use efficiency performance standards for various water uses by December 31, 2000. The department shall engage in a negotiated rule-making process involving representatives of interested parties. However, if the participants do not reach consensus by July 1, 2000, the department shall proceed with the adoption of rules using the advice and guidance of the participants to the extent possible. The standards shall be based on the quantity of water required for reasonable and beneficial use of water without waste. The rules shall also address standards for reasonable conveyance loss of water for various means of water conveyance. Basin management plans adopted under this chapter or watershed plans adopted under chapter 90.82 RCW may specify water use efficiency performance standards for the basin or watershed that vary from and supersede those adopted by the department under this section if Washington state government is a participant in the planning process and agrees with the locally based standards. The department shall adopt rules implementing locally determined standards.

(3) The state-wide or local standards adopted under this section shall be used for water demand forecasting, public water system planning, and assessing whether new water rights are needed. In addition, the standards shall be used to guide the development and evaluation of water conservation plans developed under chapter 43.99E RCW and RCW 43.20.230.

(4) Any person claiming a right or a need to the use of water in excess of the standards adopted under this section carries the burden of showing that special circumstances require a variance from the standards.

(5) The department shall consult with the Washington State University cooperative extension service and the United States natural resource conservation service regarding normal water duties for irrigation water uses.

PART II

RECLAIMED WATER

Sec. 201. RCW 90.46.005 and 1997 c 355 s 1 are each amended to read as follows:

The legislature finds that by encouraging the use of reclaimed water while assuring the health and safety of all Washington citizens and the protection of its environment, the state of Washington will continue to use water in the best interests of present and future generations.

To facilitate the use of reclaimed water as soon as is practicable, the legislature encourages the cooperative efforts of the public and private sectors and the use of pilot projects to effectuate the goals of this chapter. The legislature further directs the department of health and the department of ecology to coordinate efforts towards developing an efficient and streamlined process for creating and implementing processes for the use of reclaimed water. The department of ecology is the lead agency for reclaimed water permitting and design approval, and the department of health is to provide public health input and assessment on all department of ecology reclaimed water permit decisions.

It is hereby declared that the people of the state of Washington have a primary interest in the development of facilities to provide reclaimed water to replace potable water in nonpotable applications, to supplement existing surface and ground water supplies, and to assist in meeting the future water requirements of the state. The use of reclaimed water will contribute to the restoration and protection of instream flows, which are crucial to preservation of the state's salmonid fishery resources.

The legislature further finds and declares that the utilization of reclaimed water by local communities for domestic, agricultural, industrial, recreational, and fish and wildlife habitat creation and enhancement purposes, including wetland enhancement, will contribute to the peace, health, safety, and welfare of the people of the state of Washington. To the extent reclaimed water is appropriate for beneficial uses, it should be so used to preserve potable water for drinking purposes. Use of reclaimed water constitutes the development of new basic water supplies needed for future generations.

The legislature further finds and declares that the use of reclaimed water is not inconsistent with the policy of antidegradation of state waters announced in other state statutes, including the water pollution control act, chapter 90.48 RCW and the water resources act, chapter 90.54 RCW.

The legislature finds that other states, including California, Florida, and Arizona, have successfully used reclaimed water to supplement existing water supplies without threatening existing resources or public health.

It is the intent of the legislature that the department of ecology and the department of health undertake the necessary steps to encourage the development of water reclamation facilities so that reclaimed water may be made available to help meet the growing water requirements of the state.

The legislature further finds and declares that reclaimed water facilities are water pollution control facilities as defined in chapter 70.146 RCW and are eligible for financial assistance as provided in chapter 70.146 RCW. The legislature finds that funding demonstration projects will ensure the future use of reclaimed water. The demonstration projects in RCW 90.46.110 are varied in nature and will provide the experience necessary to test different facets of the standards and refine a variety of technologies so that water purveyors can begin to use reclaimed water technology in a more cost-effective manner. This is especially critical in smaller cities and communities where the feasibility for such projects is great, but there are scarce resources to develop the necessary facilities.

Sec. 202. RCW 90.46.030 and 1992 c 204 s 4 are each amended to read as follows:

(1) The department of ((~~health~~)) ecology shall, in coordination with the department of ((~~ecology~~)) health, adopt ((~~a single set of standards, procedures, and guidelines on or before August 1, 1993~~)) rules by December 31, 2000, for the industrial and commercial use of reclaimed water.

(2) The department of ((~~health~~)) ecology may issue a reclaimed water permit for industrial and commercial uses of reclaimed water to the generator of reclaimed water who may then distribute the water, subject to provisions in the permit governing the location, rate, water quality, and purposes of use.

(3) The department of ((~~health~~)) ecology in consultation with the advisory committee established in RCW 90.46.050, shall develop recommendations for a fee structure for permits issued under subsection (2) of this section. Fees shall be established in amounts to fully recover, and not exceed, expenses incurred by the department of health and the department of ecology in processing permit applications and modifications, monitoring and evaluating compliance with permits, and conducting inspections and supporting the reasonable overhead expenses that are directly related to these activities. ((~~Permit fees may not be used for research or enforcement activities. The department of health shall not issue permits under this section until a fee structure has been established.~~))

(4) A permit under this section for use of reclaimed water may be issued only to a municipal, quasi-municipal, or other governmental entity or to the holder of a waste discharge permit issued under chapter 90.48 RCW.

(5) The authority and duties created in this section are in addition to any authority and duties already provided in law with regard to sewage and wastewater collection, treatment, and disposal for the protection of health and safety of the state's waters. Nothing in this section limits the powers of the state or any political subdivision to exercise such authority.

Sec. 203. RCW 90.46.040 and 1992 c 204 s 5 are each amended to read as follows:

(1) The department of ecology shall, in coordination with the department of health, adopt ((~~a single set of standards, procedures, and guidelines, on or before August 1, 1993~~)) rules by December 31, 2000, for land applications of reclaimed water.

(2) A permit is required for any land application of reclaimed water. The department of ecology may issue a reclaimed water permit under chapter 90.48 RCW to the generator of reclaimed water who may then distribute the water, subject to provisions in the permit governing the location, rate, water quality, and purpose of use. The department of ecology shall not issue more than one permit for any individual land application of reclaimed water to a single generator.

(3) In cases where the department of ecology determines, in land applications of reclaimed water, that a ((~~significant~~)) risk to the public health exists, the department shall refer the application to the department of health for review and consultation and the department of health may require fees appropriate for review and consultation from the applicant pursuant to RCW 43.70.250.

(5) The authority and duties created in this section are in addition to any authority and duties already provided in law. Nothing in this section limits the powers of the state or any political subdivision to exercise such authority.

NEW SECTION. Sec. 204. A new section is added to chapter 90.46 RCW to read as follows:

The departments of ecology and health may adopt rules as necessary to carry out the intent of this chapter. If rules are adopted, the rules shall identify permit and design approval requirements under chapters 43.20, 70.116, 70.119A, 70.142, 90.03, 90.44, and 90.48 RCW applicable to the generation and distribution of reclaimed water, and identify criteria to determine when the use of reclaimed water is feasible to replace nonpotable water uses.

Sec. 205. RCW 90.46.120 and 1997 c 444 s 1 are each amended to read as follows:

((The owner of a wastewater treatment facility that is reclaiming water with a permit issued under this chapter has the exclusive right to any reclaimed water generated by the wastewater treatment facility. Use and distribution of the reclaimed water by the owner of the wastewater treatment facility is exempt from the permit requirements of RCW 90.03.250 and 90.44.060.)) Revenues derived from the reclaimed water facility shall be used only to offset the cost of operation of the wastewater utility fund or other applicable source of system-wide funding.

If the proposed use or uses of reclaimed water are intended to augment or replace potable water supplies or will create the potential for the development of additional potable water supplies, such use or uses shall be considered in the development of the regional water supply plan or plans addressing potable water supply service by multiple water purveyors. This may include water system plans and coordinated water system plans adopted under chapters 43.20 and 70.116 RCW. The owner of a wastewater treatment facility that proposes to reclaim water shall be included as a participant in the development of such regional water supply ((~~plan or~~)) plans and water system plans. The water supply planning activities shall be developed and coordinated to ensure that opportunities for reclaimed water are evaluated and that proposals for construction in public rights of way delineated within the plan consider infrastructure needed to distribute reclaimed water. Wastewater plans adopted under chapter 90.48 RCW shall include a statement of certification that reclamation and reuse elements in applicable regional water supply plans and water system plans have been fully considered and accounted for with regard to the need for future distribution of reclaimed water.

NEW SECTION. Sec. 206. A new section is added to chapter 90.46 RCW to read as follows:

The department of ecology, in consultation with the department of health and water purveyors, shall adopt rules by December 31, 2000, establishing criteria to determine when the use of reclaimed water is feasible to replace potable water supplied for nonpotable water use. Local governments may adopt ordinances requiring the use of reclaimed water for nonpotable uses when determined feasible.

Sec. 207. RCW 90.46.130 and 1997 c 444 s 4 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, the owner of a wastewater treatment facility that is reclaiming water with a permit issued under this chapter has the exclusive right, subject to the terms of the permit and as otherwise provided in this chapter, to any reclaimed water generated by the wastewater treatment facility. Upon securing a permit under this chapter, the use and distribution of the reclaimed water by the owner of the wastewater treatment facility is exempt from the requirements to obtain a permit under RCW 90.03.250 and 90.44.060 and the requirements to obtain approval of a change or amendment of a water right under RCW 90.03.380, 90.03.383, 90.03.390, 90.44.100, or 90.44.105.

(2) If the state of Washington or the United States provides funding for the construction of reclaimed water facilities, the state shall establish a trust water right under chapter 90.38 or 90.42 RCW for the fraction of the reclaimed water attributable to such funding. The priority of use for the state's share of reclaimed water is instream flow restoration and enhancement. The department may accept an alternate water right from the reclaimed water project owner in lieu of reclaimed project water if the alternate water right is more advantageous for instream flow restoration.

(3) Facilities that reclaim water under this chapter shall not impair any existing water right ((~~downstream from any freshwater discharge points of such facilities unless compensation or mitigation for such impairment is agreed to by the holder of the affected water right~~)) unless the holder of the water right is equitably compensated.

PART III

WATER RIGHT CHANGES AND TRANSFERS

Sec. 301. RCW 90.03.380 and 1997 c 442 s 801 are each amended to read as follows:

(1) The right to the use of water which has been applied to a beneficial use in the state shall be and remain appurtenant to the land or place upon which the ((~~same~~)) water is used((~~: PROVIDED, HOWEVER, That~~)). However, the right may be transferred to another or to others and become appurtenant to any other land or place of use without loss of priority of right theretofore established if ((~~such~~)) the change can be made without detriment or injury to existing rights. The point of diversion of water for beneficial use or the purpose of use may be changed, if ((~~such~~)) the change can be made without detriment or injury to existing rights. ((A change in the place of use, point of diversion, and/or purpose of use of a water right to enable irrigation of additional acreage or the addition of new uses may be permitted if such change results in no increase in the annual consumptive quantity of water used under the water right. For purposes of this section, "annual consumptive quantity" means the estimated or actual annual amount of water diverted pursuant to the water right, reduced by the estimated annual amount of return flows, averaged over the most recent five-year period of continuous beneficial use of the water right.))

(2) Before any transfer of ((~~such~~)) a right to use water or change of the point of diversion of water or change of purpose of use can be made, any person having an interest in the transfer or change, shall file a written application therefor with the department((~~, and the~~)) on a form prescribed by the department. The application must be accompanied with the applicable fee as provided by RCW 90.03.470. The application shall not be granted until notice of the application is published as provided in RCW 90.03.280. ((~~If it shall appear that such~~))

(3) The department shall make a tentative determination as to the validity and extent of the water right proposed to be transferred or changed, including the reasonable and beneficial use of water actually used. In its determination, the department shall consider whether all or any portion of the asserted water right has been lost by nonuse under common law abandonment or forfeiture under chapter 90.14 RCW, and whether any portion of the water diverted or withdrawn constitutes the waste of water. If the department determines that any portion of the current or former use of water under the asserted water right proposed for change or transfer is not a water right, or constitutes waste of water, that portion of the right shall not be approved for change or transfer. If the department determines that (a) the asserted water right is valid, (b) the water right as proposed to be changed will be for beneficial use, (c) the public interest will not be detrimentally affected by the change, and (d) the transfer or ((~~such~~)) change may be made without injury or detriment to existing rights, the department shall issue to the applicant an authorization to make the change. Upon determining that the change has been completed and water has been put to beneficial use in accordance with the authorization, the department shall issue a certificate in duplicate granting the right for such transfer or for such change of point of diversion or of use. The certificate so issued shall be filed and be made a record with the department and the duplicate certificate issued to the applicant ((~~may~~)) must be filed with the county auditor in like manner and with the same effect as provided in the original certificate or permit to divert water.

((~~(2)~~)) (4) If an application for change proposes to transfer water rights from one irrigation district to another, the department shall, before publication of notice, receive concurrence from each of the irrigation districts that such transfer or change will not adversely affect the ability to deliver water to other landowners or impair the financial integrity of either of the districts.

((~~(3)~~)) (5) A change in place of use by an individual water user or users of water provided by an irrigation district need only receive approval for the change from the board of directors of the district if the use of water continues within the irrigation district, and when water is provided by an irrigation entity that is a member of a board of joint control created under chapter 87.80 RCW, approval need only be received from the board of joint control if the use of water continues within the area of jurisdiction of the joint board and the change can be made without detriment or injury to existing rights. The acreage irrigated within an irrigation district may not be expanded through use of conserved water unless approval has been received from the department in accordance with section 302 of this act.

((~~(4)~~)) (6) The department may approve an application for change that proposes to transfer or change an inchoate water right permit or certificate held by a public water system in accordance with section 408 of this act.

(7) This section shall not apply to trust water rights acquired by the state through the funding of water conservation projects under chapter 90.38 RCW or RCW 90.42.010 through 90.42.070.

NEW SECTION. Sec. 302. A new section is added to chapter 90.03 RCW to read as follows:

(1) After the effective date of this section, if a person holding a water right established under the laws of the state of Washington conserves water or proposes to conserve water, the person may, in accordance with RCW 90.03.380, apply to the department for a change in purpose or place of use or point of diversion or any combination thereof for the purpose of using conserved water for a new purpose or in a place not originally authorized for beneficial use. The maximum acreage allowed to be irrigated may be expanded and the place of use and the population served by the water right may be increased beyond the original intended place of use and purpose of use of the water right only as provided by this section.

(2) If the proposed change results in no increase in the annual consumptive quantity of water used under the water right, the person proposing to make the change may retain for new use all of the transferable conserved water. For conservation projects in which the annual consumptive quantity of water will be increased, the person proposing the change or transfer must agree in writing to convey to the state of Washington the water right for at least one-half of the transferable net water savings for the purpose of establishing a trust water right under chapter 90.38 or 90.42 RCW as applicable. If state or federal funds will be employed in the conservation project, the proportion of the water savings that must be conveyed to the state of Washington shall be equivalent to the ratio of the state or federal funding to the overall project cost, but in no case less than one-half of the net water savings. The person proposing to change or transfer and use the remaining water on additional or different lands may do so only under an approved change to the water right issued by the department under RCW 90.03.380, 90.03.383, 90.03.390, or 90.44.100. Reallocation and use of conserved water under this section shall not impair any existing water right.

(3) The department may waive the requirement to convey a trust water right to the state only where there is no discernible public purpose to be benefited by establishment of a trust water right for those waters. In such case, in lieu of conveying a trust water right, the person proposing the conservation project must remit to the state treasurer a payment equal to the value of the proportion of the water right not conveyed to the state. The amount of this payment shall be determined by a licensed independent real estate appraiser selected by agreement of the department and the applicant. The basis of the appraisal shall be the value of the proportion of the conserved water not conveyed to the state in consideration of the economic value of water in the immediate area where the water right is used. The cost of the appraisal shall be shared equally by the department and the applicant. Any funds conveyed to the state under this section shall be deposited in the state stream flow restoration account established in section 1005 of this act for use in purchasing or leasing trust water rights.

NEW SECTION. Sec. 303. A new section is added to chapter 90.03 RCW to read as follows:

The department is authorized to process and render decisions on applications for change or transfer under this chapter and amendments of ground water rights under chapter 90.44 RCW as a matter of higher priority than processing and rendering decisions on applications for new water rights. Any application for a new water right for which a permit decision has not been made by the department at the time a transfer, change, or amendment is approved shall not be considered an existing water right subject to analysis as to whether the application may be injured, impaired, or detrimentally affected by the transfer or change.

Sec. 304. RCW 90.42.080 and 1993 c 98 s 4 are each amended to read as follows:

(1) The state may acquire all or portions of existing water rights, for the purposes of this chapter, by purchase, lease, gift, financing water conservation, reclaiming water, or as a consequence of the artificial storage and discharge of ground water, or by other appropriate means other than by condemnation, from any person or entity or combination of persons or entities. Once acquired, such rights are trust water rights.

(2) The department may enter into leases, contracts, or such other arrangements with other persons or entities as appropriate, to ensure that trust water rights acquired in accordance with this chapter may be exercised to the fullest possible extent.

(3) Trust water rights may be acquired by the state on a temporary or permanent basis.

(4) The provisions of RCW 90.03.380 and 90.03.390 apply to transfers of water rights under this section.

((~~(5) No funds may be expended for the purchase of water rights by the state pursuant to this section unless specifically appropriated for this purpose by the legislature.~~))

NEW SECTION. Sec. 305. A new section is added to chapter 90.03 RCW to read as follows:

A person may acquire and hold a water right for a beneficial instream purpose or purposes if the department approves a transfer or change of the water right under RCW 90.03.380 or 90.03.390. An application for change must be filed on a form prescribed by the department. Notice of the application shall be provided in the same manner as any other application filed under this chapter. An instream flow right established in this manner need not involve any diversion of water or other physical works. An instream flow right is appurtenant to a stream or reach of stream specified in the department's change approval. When changed or transferred in this manner, the water right shall retain its original priority date.

PART IV

PUBLIC WATER SUPPLY

NEW SECTION. Sec. 401. A new section is added to chapter 90.03 RCW to read as follows:

It is in the public interest for public water systems' certificated water rights that document a combination of water that has been put to beneficial use and water that has not been put to beneficial use to be managed and regulated in a manner that:

(1) Provides for concurrent development and use of an inchoate water right permit and the restoration of instream flows in geographic areas with salmonid stocks listed or proposed for listing as threatened or endangered under the federal endangered species act, or with stocks listed as critical or depressed under the state salmon and steelhead stock inventory;

(2) Provides for the concurrent use of an inchoate water right permit and the retention of instream flows to provide for the preservation of wildlife, fish, scenic, aesthetic, and navigational values and other environmental values in geographic areas without salmonid stocks listed or proposed for listing as threatened or endangered under the endangered species act or with stocks listed as critical or depressed under the state salmon and steelhead stock inventory;

(3) Provides clarity and certainty regarding the legal status of those rights for purposes of planning for water supply, land use, watershed management, and growth management;

(4) Allows public water systems, through existing planning and regulatory processes, the certainty required for public water systems to operate in a safe, reliable, and effective manner consistent with their duties to:

(a) Implement programs that promote the efficient management and use of water resources;

(b) Provide water service in a timely and reasonable manner; and

(5) Ensures the effective use of existing water supplies through water conservation; and

(6) Promotes the formation of satellite management agencies to facilitate regional management of public water supplies.

Sec. 402. RCW 90.03.330 and 1987 c 109 s 89 are each amended to read as follows:

(1) Upon a showing satisfactory to the department that any appropriation has been perfected in accordance with the provisions of this chapter, it shall be the duty of the department to issue to the applicant a certificate stating such facts in a form ((~~to be~~)) prescribed by ((~~him~~)) the department, and such certificate shall ((~~thereupon~~)) be recorded with the department. Upon the request of a public water system, the department shall issue incremental certificates of water right, not more than once every six years, that reflect either instantaneous or annual quantities of water, or both, perfected by actual beneficial use. Pumping or diversion records, meter data, or other reasonable information showing the extent of actual beneficial use of water shall accompany the request. Any original water right certificate issued, as provided by this chapter, shall be recorded with the department and thereafter, at the expense of the party receiving the ((~~same~~)) certificate, be transmitted by the department ((~~transmitted~~)) to the county auditor of the county or counties where the distributing system or any part thereof is located((~~, and~~)). The certificate shall be recorded in the office of such county auditor, and thereafter be transmitted to the ((~~owner thereof~~)) certificate holder.

(2) Public water system certificates of water right that document a combination of water that has been put to beneficial use and water that has never been put to use, that have department of health approval for the source for which the right is associated, and for which the entity holding the certificate has constructed facilities in place to use the water authorized by the water right, shall be administered in the following manner:

(a) Any instantaneous or annual quantity of water that has been perfected by application of water to actual beneficial use prior to the effective date of this section shall remain a certificated right in good standing under this section subject to issuance of a superseding certificate under section 405 of this act. The application of water to beneficial use must be shown by pumping or diversion records, meter data, or other reasonable information showing the extent of actual beneficial use.

(b) Any instantaneous or annual quantity of water not perfected by actual beneficial use prior to the effective date of this section is reinstated as a water right permit within the meaning of this chapter and the holder of the permit is authorized to continue development and use of the inchoate water right. The reinstated permit shall be administered by the department as an inchoate right in permit status in good standing, with a priority date as of the original application, subject to the requirements of section 407 of this act.

(3)(a) For a public water system holding a permit reinstated by this section and having a department of health approved number of connections, and for which the original water right application filing was for a discrete number of connections, water use by up to the department of health approved number of connections as of the effective date of this section is allowed within the existing water service area of the public water system. If the public water system does not have an existing service area established under chapter 43.20 or 70.116 RCW, the place of use as authorized under the original certificate shall be the place of use for water that is reinstated to permit status under this section.

(b) For any public water system holding permits reinstated by this section and having a department of health approved number of equivalent residential units, and for which the original water right application filing was made for a discrete number of connections or a then current population and future requirements of the municipality or community, water services shall be allowed up to the number of equivalent residential units approved by the department of health as of the effective date of this section for the existing service area of the public water system as established under chapter 43.20 or 70.116 RCW. However, any water supply interties must also comply with RCW 90.03.383.

(c) For any public water system holding permits reinstated by this section with an unspecified number of connections in its department of health approved water system plan, and the original application filing was made for then current population and future requirements of the municipality or community, water services shall be allowed to satisfy the existing retail service area as established under chapter 43.20 or 70.116 RCW, retail service area in-filling, and existing wholesale water delivery as of the effective date of this section. However, any interties must also comply with RCW 90.03.383.

Sec. 403. RCW 90.03.015 and 1987 c 109 s 65 are each amended to read as follows:

((~~As used in this chapter:~~)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Department" means the department of ecology((;)).

(2) "Director" means the director of ecology((~~; and~~)).

(3) "Person" means any firm, association, water users' association, corporation, irrigation district, or municipal corporation, as well as an individual.

(4) "Inchoate water right" means an incomplete appropriative right in good standing so long as the requirements of law are being fulfilled.

(5) "Public water system" has the meaning provided in RCW 70.119A.020.

Sec. 404. RCW 39.34.020 and 1985 c 33 s 1 are each amended to read as follows:

For the purposes of this chapter, the term "public agency" shall mean any agency, political subdivision, or unit of local government of this state including, but not limited to, municipal corporations, quasi municipal corporations, special purpose districts, ((~~and~~)) local service districts, and public water systems as defined in RCW 70.119A.020; any agency of the state government; any agency of the United States; any Indian tribe recognized as such by the federal government; and any political subdivision of another state.

The term "state" shall mean a state of the United States.

NEW SECTION. Sec. 405. A new section is added to chapter 90.03 RCW to read as follows:

(1) Any public water system asserting that it holds a certificate that documents a combination of water put to beneficial use and water not yet put to beneficial use shall provide evidence to the department demonstrating that the criteria in subsection (2) of this section are met such that a superseding certificate and water rights permit should be issued. If the department, upon reviewing a public water system plan or other applicable information, determines that the system has an inchoate water right as provided in RCW 90.03.330, the department shall issue a superseding certificate for the portion of the right that has been put to beneficial use and shall issue a permit for the inchoate portion of the water right that is reinstated to permit status. The department shall condition permits reinstated by RCW 90.03.330 with the performance standards created by section 407 of this act and a development schedule. The development schedule shall be twenty years from the effective date of this section with the option to extend the schedule if good cause is shown under RCW 90.03.320, except that the department may:

(a) Authorize a development schedule longer than twenty years, but not more than fifty years, if a planned need is demonstrated, and (i) a withdrawal facility with a hydraulic capacity beyond that needed for twenty years was constructed, or (ii) debt service requirements extend for such a period;

(b) Authorize a development schedule of less than twenty years if the permittee, pursuant to reasonable diligence, can perfect inchoate water right quantities by actual beneficial use in a shorter period of time; or

(c) Deny any time for further development if there is no demonstrated need for the water based on the water system plan or other applicable information.

(2) Upon any determination of noncompliance with the performance standards created by section 407 of this act, the permittee shall be granted, by written notice, a reasonable period of time to effect compliance. If a public water system receiving such a notification disagrees with the department's determination of a reasonable time for compliance, it may, at its election, initiate nonbinding mediation with the department to resolve the dispute. After mediation, if the dispute is not resolved, the state shall issue the permit to effect the performance standards. The permit is appealable to the pollution control hearings board.

(3) At the end of the construction schedule authorized in the permit, the permit holder may request an extension of time only as provided in RCW 90.03.320.

Sec. 406. RCW 90.03.386 and 1991 c 350 s 2 are each amended to read as follows:

(1) Within service areas established pursuant to chapters 43.20 and 70.116 RCW, the department of ecology and the department of health shall coordinate approval procedures to ensure compliance and consistency with the approved water system plan.

(2) An application for change of water right may be approved to establish a common service area for the use of existing water rights across multiple service areas that have been established under chapters 43.20 and 70.116 RCW. The department of ecology and the department of health shall coordinate review and approval procedures to ensure compliance and consistency with an approved coordinated water system plan or regional water plan for any common place of use proposal. All water rights for public water supply within the proposed common service area shall be evaluated as part of the proposal.

NEW SECTION. Sec. 407. A new section is added to chapter 90.03 RCW to read as follows:

(1) Any permittee with a water right permit reinstated under section 405 of this act must meet the performance standards of this subsection. Demonstration of compliance with performance standards shall be through existing planning programs and processes of the department of health or ecology to the extent practicable. All permittees shall initially document compliance with the performance standards not less than two years and not more than eight years from the effective date of this section to the department of ecology and then in its water system plan update, provided a water system plan is required. Any permittee not required to complete a water system plan shall demonstrate compliance in a reasonable, written format. If the permittee complies with the performance standards, it will be considered in compliance with RCW 90.03.320. The performance standards are:

(a) Evidence demonstrating a need for the water within the development schedule specified by the permit consistent with demand forecasts prepared in accordance with the demand forecasting methods specified by the departments of ecology and health;

(b) Evidence that the water system's use of water is fully consistent with approved local land use planning within the constraints of water availability and cost;

(c) Evidence that the water use meets state conservation and water use efficiency requirements existing at the time the documentation is submitted;

(d) Current information on how the utility's recent and proposed beneficial use of water under such permits is consistent with state and federal laws legally applicable to water use under the permit; and

(e) Evidence of participation by the permittee, to the extent practicable, in watershed planning under chapter 90.82 RCW, coordinated water system planning under chapter 70.119 RCW, or other collaborative watershed planning efforts, if initiated.

(2) For the performance measures in subsection (1) of this section, the department of health is responsible for ensuring compliance with subsection (1)(a) through (c) of this section and the department of ecology is responsible for ensuring compliance with subsection (1)(d) and (e) of this section when the performance measures are identified in a water system plan. If no water system plan is required, the department of ecology is responsible for ensuring compliance with all performance measures.

(3) For public water systems with a source of water that is either a surface water source or a ground water source that is interconnected with a surface water body that provides habitat for one or more salmonid stocks that are listed or proposed for listing as threatened or endangered under the federal endangered species act or with stocks listed as critical or depressed under the state salmon and steelhead stock inventory, the public water system shall enter into and implement an interlocal agreement with the departments of ecology and fish and wildlife as provided by chapter 39.34 RCW.

(a) The purpose of the interlocal agreement is to identify and make mutual commitments to:

(i) Take immediate actions to arrest the further decline in fish stock health and abundance;

(ii) Establish, protect, and restore an instream flow that is sufficient to ensure that the instream flow contributes to the recovery and maintenance of salmonid stocks. Any instream flows that are established in connection with an interlocal agreement for a water resource inventory area, as defined by chapter 173-500 WAC, overlaying the same geographic areas that received a grant from the department under chapter 90.82 RCW shall be interim until such planning for instream flow, if applicable, is complete under chapter 90.82 RCW. Interim instream flows established shall be conservative with regard to preserving instream values;

(iii) Define a strategy to restore stream flows to the established instream flow;

(iv) Establish benchmarks or milestones that can be used to objectively measure the success in the recovery and maintenance of the listed salmonid stocks; and

(v) Establish provisions for an adaptive management approach to modify the interlocal agreement to effect its goal.

(b) If an interlocal agreement is not developed and signed by the departments of ecology and fish and wildlife and the permittee within two years of the effective date of this section, the permittee's use of water from the effective date of this section under the permit shall be subject to applicable source instream flows existing as of the effective date of this section created by rule. If instream flows have not been established or are insufficient, an instream flow shall be specified by the department in consultation with the department of fish and wildlife under RCW 75.20.050 by permit proviso, and any future instream flows adopted or amended by the department.

(c) Within four years of the effective date of this section, and every three years thereafter, the department in consultation with the department of fish and wildlife, shall review the interlocal agreement and its implementation to determine its effectiveness in contributing to the recovery and maintenance of the listed salmonid stocks and review the actions of all parties to implement the agreement. If the department of ecology determines by written findings that a permittee who is party to the interlocal agreement has failed to abide by the agreement, it shall condition the use of water under the permit, from the effective date of this section, to applicable instream flows existing as of the effective date of this section created by rule. If instream flows have not been established or are insufficient, an instream flow shall be specified by the department in consultation with the department of fish and wildlife under RCW 75.20.050 by permit proviso, and any future instream flows adopted or amended by the department.

(d) If any permittee who is party to the interlocal agreement disagrees with any determinations made by the department under this section, the permittee may, at its election, initiate nonbinding mediation with the department to resolve a dispute. After mediation, if the dispute is not resolved, the permittee may appeal any findings made by the department to the pollution control hearings board.

(4) For any public water system permittee in an area without stocks listed as threatened or endangered under the endangered species act and without stocks listed as critical or depressed in the state salmon and steelhead stock inventory, the use of inchoate permits shall be conditioned with instream flows established under chapter 90.22 or 90.54 RCW existing as of the effective date of this section, for the applicable source.

(5) Nothing in this section waives any other requirement of the law related to the use of water.

NEW SECTION. Sec. 408. A new section is added to chapter 90.03 RCW to read as follows:

The department shall approve an application for change that proposes to change or transfer an inchoate water right from one public water system to another or to expand the place of use of an existing public water system if in addition to the requirements of RCW 90.03.380:

(1) The proposed change will authorize the use of water consistent with a state-approved water system plan under chapter 43.20 RCW, and any approved comprehensive plan under chapter 36.70A or 36.70 RCW, or in the absence of such a plan, an approved plan under chapter 35.63 RCW. The department shall review water right issues concurrently with department of health review of the associated water system plan describing any proposed transfer of water. Any transfer of more than two million gallons of water per day across a water resource inventory area boundary must be consistent with an approved watershed plan under chapter 90.82 RCW, coordinated water system plan under chapter 70.116 RCW, or a similar plan. In the absence of such a plan, the department shall secure the approval of the counties affected by the transfer prior to approval of the change;

(2) The public water system has implemented water conservation measures so that its water use meets or exceeds state performance standards. For transfers of water by intertie, the receiving public water system's conservation performance must be equivalent to or exceed the sending system's performance; and

(3)(a) The use of water is subject to instream flows to protect the quality of the natural environment as provided in RCW 90.54.020(3)(a) or 75.20.050 and a contribution to flow restoration is made as provided under (b) of this subsection. The department shall condition the use of water with any instream flow proviso on the water right proposed for change or any applicable instream flows contained in an adopted rule, unless the department, in consultation with the department of fish and wildlife, determines that the applicable instream flow is not sufficient. Interim instream flows shall be established that are conservative with regard to preserving instream values. Any interim instream flow placed as a proviso on an approved change under this section is effective until permanent instream flows are developed under a watershed planning program under chapter 90.82 RCW, or in the absence of such a program, by the department of ecology under chapters 90.22 and 90.54 RCW.

(b) In addition to the provisions of (a) of this subsection, in areas where adopted minimum instream flows have not been met in eight of the most recent ten years, the department shall require the applicant to provide a contribution to assist in the restoration of aquatic ecosystems in the affected watershed or watersheds equal to ten percent of the volume or value of the unused water to be transferred. The contribution can be a transfer of water to the state trust water rights program, or at the applicant's discretion a one-time monetary contribution. For a monetary contribution, the applicant proposing the transfer shall remit to the state treasurer a payment based on the value of the water as determined by a licensed independent real estate appraiser selected by agreement of the department and the applicant. The cost of the appraisal shall be borne by the applicant. Any funds conveyed to the state under this section shall be deposited in the state stream flow restoration account established in section 1005 of this act for use in purchasing or leasing trust water rights.

NEW SECTION. Sec. 409. A new section is added to chapter 90.03 RCW to read as follows:

The department is authorized to enter into agreements with satellite management agencies to effect sound water management and public health objectives consistent with this chapter and chapters 43.20 and 70.116 RCW. The department shall seek expressions of the public interest in developing the agreements and any such agreement shall not authorize any impairment of existing rights. Implementation of the agreement must result in a net benefit to the public when public health and environmental values are evaluated together. In developing the agreements, the department shall consider, but is not limited to considering:

(1) Benefits to regional water supplies;

(2) The effect of existing and future withdrawals of ground water under RCW 90.44.050;

(3) Appropriate mitigation or contingency plans for water use during low flow periods;

(4) Appropriate conservation and metering practices;

(5) Water management responsibilities proportional to the volume of water being moved, if any; and

(6) Water management activities targeted at establishment, protection, and restoration of instream flows.

Sec. 410. RCW 90.03.383 and 1991 c 350 s 1 are each amended to read as follows:

(1) The legislature recognizes the value of interties for improving the reliability of public water systems, enhancing their management, and more efficiently utilizing the increasingly limited resource. Given the continued growth in the most populous areas of the state, the increased complexity of public water supply management, and the trend toward regional planning and regional solutions to resource issues, interconnections of public water systems through interties provide a valuable tool to ensure reliable public water supplies for the citizens of the state. Public water systems have been encouraged in the past to utilize interties to achieve public health and resource management objectives. The legislature finds that it is in the public interest to recognize interties existing and in use as of January 1, 1991, and to have associated water rights modified by the department of ecology to reflect current use of water through those interties, pursuant to subsection (3) of this section. The legislature further finds it in the public interest to develop a coordinated process to review proposals for interties commencing use after January 1, 1991.

(2) For the purposes of this section, the following definitions shall apply:

(a) "Interties" are interconnections between public water systems permitting exchange, acquisition, or delivery of water between those systems for other than emergency supply purposes, where such exchange or delivery is within established instantaneous and annual withdrawal rates specified in the systems' existing water right permits or certificates, or contained in claims filed pursuant to chapter 90.14 RCW, and which results in better management of public water supply consistent with existing rights and obligations. Interties include interconnections between public water systems permitting exchange, acquisition, or delivery of water to serve as primary or secondary sources of supply((~~, but do not include development of new sources of supply to meet future demand~~)).

(b) "Service area" is the area designated in a water system plan or a coordinated water system plan pursuant to chapter 43.20 or 70.116 RCW respectively. When a public water system does not have a designated service area subject to the approval process of those chapters, the service area shall be the designated place of use contained in the water right permit or certificate, or contained in the claim filed pursuant to chapter 90.14 RCW.

(3) Public water systems with interties existing and in use as of January 1, 1991, or that have received written approval from the department of health prior to that date, shall file written notice of those interties with the department of health and the department of ecology. The notice may be incorporated into the public water system's five-year update of its water system plan, but shall be filed no later than June 30, 1996. The notice shall identify the location of the intertie; the dates of its first use; the purpose, capacity, and current use; the intertie agreement of the parties and the service areas assigned; and other information reasonably necessary to modify the water right permit. Notwithstanding the provisions of RCW 90.03.380 and 90.44.100, for public water systems with interties existing and in use as of January 1, 1991, the department of ecology, upon receipt of notice meeting the requirements of this subsection, shall, as soon as practicable, modify the place of use descriptions in the water right permits, certificates, or claims to reflect the actual use through such interties, provided that the place of use is within service area designations established in a water system plan approved pursuant to chapter 43.20 RCW, or a coordinated water system plan approved pursuant to chapter 70.116 RCW, and further provided that the water used is within the instantaneous and annual withdrawal rates specified in the water right permit and that no outstanding complaints of impairment to existing water rights have been filed with the department of ecology prior to September 1, 1991. Where such complaints of impairment have been received, the department of ecology shall make all reasonable efforts to resolve them in a timely manner through agreement of the parties or through available administrative remedies.

(4) Notwithstanding the provisions of RCW 90.03.380 and 90.44.100, exchange or delivery of water through interties commencing use after January 1, 1991, shall be permitted when the intertie improves overall system reliability, enhances the manageability of the systems, provides opportunities for conjunctive use, or delays or avoids the need to develop new water sources, and otherwise meets the requirements of this section, provided that each public water system's water use shall not exceed the instantaneous or annual withdrawal rate specified in its water right authorization, shall not adversely affect existing water rights, and shall not be inconsistent with state-approved plans such as water system plans or other plans which include specific proposals for construction of interties. Interties commencing use after January 1, 1991, shall not be inconsistent with regional water resource plans developed pursuant to chapter 90.54 RCW.

(5) For public water systems subject to the approval process of chapter 43.20 RCW or chapter 70.116 RCW, proposals for interties commencing use after January 1, 1991, shall be incorporated into water system plans pursuant to chapter 43.20 RCW or coordinated water system plans pursuant to chapter 70.116 RCW and submitted to the department of health and the department of ecology for review and approval as provided for in subsections (5) through (9) of this section. The plan shall state how the proposed intertie will improve overall system reliability, enhance the manageability of the systems, provide opportunities for conjunctive use, or delay or avoid the need to develop new water sources.

(6) The department of health shall be responsible for review and approval of proposals for new interties. In its review the department of health shall determine whether the intertie satisfies the criteria of subsection (4) of this section, with the exception of water rights considerations, which are the responsibility of the department of ecology, and shall determine whether the intertie is necessary to address emergent public health or safety concerns associated with public water supply.

(7) If the intertie is determined by the department of health to be necessary to address emergent public health or safety concerns associated with public water supply, the public water system shall amend its water system plan as required and shall file an application with the department of ecology to change its existing water right to reflect the proposed use of the water as described in the approved water system plan. The department of ecology shall process the application for change pursuant to RCW 90.03.380 or 90.44.100 as appropriate, except that, notwithstanding the requirements of those sections regarding notice and protest periods, applicants shall be required to publish notice one time, and the comment period shall be fifteen days from the date of publication of the notice. Within sixty days of receiving the application, the department of ecology shall issue findings and advise the department of health if existing water rights are determined to be adversely affected. If no determination is provided by the department of ecology within the sixty-day period, the department of health shall proceed as if existing rights are not adversely affected by the proposed intertie. The department of ecology may obtain an extension of the sixty-day period by submitting written notice to the department of health and to the applicant indicating a definite date by which its determination will be made. No additional extensions shall be granted, and in no event shall the total review period for the department of ecology exceed one hundred eighty days.

(8) If the department of health determines the proposed intertie appears to meet the requirements of subsection (4) of this section but is not necessary to address emergent public health or safety concerns associated with public water supply, the department of health shall instruct the applicant to submit to the department of ecology an application for change to the underlying water right or claim as necessary to reflect the new place of use. The department of ecology shall consider the applications pursuant to the provisions of RCW 90.03.380 and 90.44.100 as appropriate. If in its review of proposed interties and associated water rights the department of ecology determines that additional information is required to act on the application, the department may request applicants to provide information necessary for its decision, consistent with agency rules and written guidelines. Parties disagreeing with the decision of the department of ecology on the application for change in place of use may appeal the decision to the pollution control hearings board.

(9) The department of health may approve plans containing intertie proposals prior to the department of ecology's decision on the water right application for change in place of use. However, notwithstanding such approval, construction work on the intertie shall not begin until the department of ecology issues the appropriate water right document to the applicant consistent with the approved plan.

NEW SECTION. Sec. 411. A new section is added to chapter 90.03 RCW to read as follows:

Nothing in section 401, 405, or 407 through 409 of this act or RCW 90.03.330, 90.03.015, 39.34.020, 90.03.386, or 90.03.383 shall impair any existing water right.

PART V

GROUND WATER EXEMPTION

Sec. 501. RCW 90.44.050 and 1987 c 109 s 108 are each amended to read as follows:

((~~After June 6, 1945,~~)) No withdrawal of public ground waters of the state shall be begun, nor shall any well or other works for such withdrawal be constructed, unless an application to appropriate such waters has been made to the department and a permit has been granted ((by it as herein provided: EXCEPT, HOWEVER, That any withdrawal of public ground waters for stock-watering purposes, or for the watering of a lawn or of a noncommercial garden not exceeding one-half acre in area, or for single or group domestic uses in an amount not exceeding five thousand gallons a day, or for an industrial purpose in an amount not exceeding five thousand gallons a day, is and shall be exempt from the provisions of this section, but, to the extent that it is regularly used beneficially, shall be entitled to a right equal to that established by a permit issued under the provisions of this chapter: PROVIDED, HOWEVER, That the department from time to time may require the person or agency making any such small withdrawal to furnish information as to the means for and the quantity of that withdrawal: PROVIDED, FURTHER, That at the option of the party making withdrawals of ground waters of the state not exceeding five thousand gallons per day, applications under this section or declarations under RCW 90.44.090 may be filed and permits and certificates obtained in the same manner and under the same requirements as is in this chapter provided in the case of withdrawals in excess of five thousand gallons a day)) except as provided in sections 502 and 503 of this act.

NEW SECTION. Sec. 502. A new section is added to chapter 90.44 RCW to read as follows:

Within two years of the effective date of this section, and afterward whenever changing water supply and water use conditions dictate, the department shall enter into agreements with each county of the state to establish the conditions under which various new withdrawals of ground water would be exempt from the permit requirement of RCW 90.44.050 for those watersheds or portions of watersheds that lie within that county's boundaries. In developing such agreements, the department shall consult with the departments of health, fish and wildlife, and community, trade, and economic development, and the department shall, as quickly as is practicable, adopt the conditions established in such agreements as rules. The agreements shall be designed to meet both state and local objectives with respect to land and water resource management, including, but not limited to:

(1) Protecting and restoring salmonid stocks that are listed or proposed for listing as threatened or endangered under the federal endangered species act or listed as critical or depressed under the state salmon and steelhead stock inventory;

(2) Complying with, and effectively implementing, the provisions of chapter 36.70A RCW;

(3) Providing for public health and safety and promoting the use of satellite management agencies to manage new public water systems;

(4) Promoting meaningful and effective watershed planning and management;

(5) Providing certainty about types of water uses that would be exempt from the permit requirements of RCW 90.44.050;

(6) Promoting cluster development to help preserve open space; and

(7) Providing the means to address and mitigate for any environmental and natural resources effects caused by either single or multiple withdrawals exempted from the permit requirements of RCW 90.44.050.

NEW SECTION. Sec. 503. A new section is added to chapter 90.44 RCW to read as follows:

(1) Except as specified in subsections (2) and (3) of this section, and until that time as an agreement or agreements under section 502 of this act have been concluded with a particular county, but not after two years from the effective date of this section, a withdrawal of public ground waters in a total amount not exceeding five thousand gallons per day is allowed for one or more of the following purposes:

(a) Stock watering up to the carrying capacity of the land;

(b) Irrigation of a lawn or noncommercial garden, the total area irrigated not to exceed one-half acre;

(d) Industrial purposes.

The purposes listed in (a) through (d) of this subsection are exempt from the permit requirements of RCW 90.44.050, and, to the extent water is beneficially used and in conformance with all other applicable laws, are entitled to a right equal to that established under the provisions of this chapter. The priority date for a right established under this section shall be the date that continuous usage of water for one or more of the exempted purposes set forth in this subsection is commenced. The department may require persons or entities making withdrawals under this section to furnish information as to the means for and the quantity of their withdrawals.

(2) Until an agreement or agreements have been concluded under section 502 of this act, but not after two years from the effective date of this section, for those watersheds or portions of watersheds that lie within a county's boundaries but outside of the areas identified in subsection (3) of this section, the county may adopt criteria by local ordinance further restricting the use of the exemption specified in subsection (1) of this section. Types of restrictions that may be placed upon use of the exemption include, but are not limited to:

(a) Limiting use to certain purposes;

(b) Limiting the amount of water that can be used for one or more purposes and the acreage that can be irrigated;

(c) Limiting the total number of exempt uses or the total quantities of water that may be withdrawn from the source, regardless of purpose; and

(d) Limiting the term of use of the exemption to the period until water can be provided by a public water system.

(3) Until an agreement or agreements have been concluded under section 502 of this act, but not after two years from the effective date of this section, for any areas of the state containing waters in which one or more salmonid stocks are listed or proposed for listing as threatened or endangered under the federal endangered species act, or are listed as critical or depressed under the state salmon and steelhead stock inventory, the use of the permit exemption specified in RCW 90.44.050 is either prohibited, or the conditions under which the exemption can be used modified, if, within that area, depleted stream flows have been identified as a contributing factor in the decline of the fishery resource by a limiting factor analysis undertaken in conjunction with the listing, and the aquifer or aquifers that would serve as the source for new water supplies would capture water from one or more of the surface water bodies that is experiencing depleted stream flows. In those areas where water service from an existing public water system or approved satellite management agency is reasonably available, use of the exemption is prohibited. In those areas where water service from an existing public water system or approved satellite management agency is not reasonably available, the exemption shall be used solely for reasonable single-family domestic purposes in an amount not to exceed four hundred gallons per day and only until water can be provided by a public water system.

(4) This section expires two years from the effective date of this section.

Sec. 504. RCW 58.17.110 and 1995 c 32 s 3 are each amended to read as follows:

(1) The city, town, or county legislative body shall inquire into the public use and interest proposed to be served by the establishment of the subdivision and dedication. ((It shall determine: (a) If appropriate provisions are made for, but not limited to, the public health, safety, and general welfare, for open spaces, drainage ways, streets or roads, alleys, other public ways, transit stops, potable water supplies, sanitary wastes, parks and recreation, playgrounds, schools and schoolgrounds, and shall consider all other relevant facts, including sidewalks and other planning features that assure safe walking conditions for students who only walk to and from school; and (b) whether the public interest will be served by the subdivision and dedication.

~~(2)~~)) A proposed subdivision and dedication shall not be approved unless the city, town, or county legislative body determines and makes written findings that: (a) Appropriate provisions are made for the public health, safety, and general welfare and for such open spaces, drainage ways, streets or roads, alleys, other public ways, transit stops, potable water supplies, sanitary wastes, parks and recreation, playgrounds, schools and schoolgrounds and all other relevant facts, including sidewalks and other planning features that assure safe walking conditions for students who only walk to and from school; and (b) the public use and interest will be served by the platting of such subdivision and dedication.

(2) In making its determination and written findings that appropriate provisions have been made for potable water supplies, the city, town, or county legislative body shall promote the reliable and efficient delivery of safe and adequate water supply by ensuring that:

(a) The number of new public water supply systems established is minimized;

(b) The use of new wells for potable water supply shall, until such time as an agreement or agreements have been concluded under section 502 of this act, be in conformance with the provisions of section 503 of this act; and

(c) If a proposed subdivision is within the future service area of an existing public water system, as identified in an approved coordinated water system plan under chapter 70.116 RCW or an approved water system plan under chapter 43.20 RCW, and the system can provide safe and reliable potable water to an applicant in a timely and reasonable manner, under guidelines developed by the department of health, the city, town, or county shall require connection to that system. If no existing public water system can provide service, the city, town, or county shall only approve new public water systems in conformance with RCW 70.119A.060(2).

(3) If ((it)) the city, town, or county legislative body finds that the proposed subdivision and dedication make ((~~such~~)) appropriate provisions as provided in subsections (1) and (2) of this section and that the public use and interest will be served, then the legislative body shall approve the proposed subdivision and dedication. Dedication of land to any public body, provision of public improvements to serve the subdivision, and/or impact fees imposed under RCW 82.02.050 through 82.02.090 may be required as a condition of subdivision approval. Dedications shall be clearly shown on the final plat. No dedication, provision of public improvements, or impact fees imposed under RCW 82.02.050 through 82.02.090 shall be allowed that constitutes an unconstitutional taking of private property. The legislative body shall not as a condition to the approval of any subdivision require a release from damages to be procured from other property owners.

((~~(3)~~)) (4) If the preliminary plat includes a dedication of a public park with an area of less than two acres and the donor has designated that the park be named in honor of a deceased individual of good character, the city, town, or county legislative body must adopt the designated name.

Sec. 505. RCW 19.27.097 and 1995 c 399 s 9 are each amended to read as follows:

(1) Each applicant for a building permit of a building necessitating potable water shall provide evidence of an adequate water supply for the intended use of the building. Evidence may be in the form of a water right permit from the department of ecology, a letter from an approved public water ((~~purveyor~~)) system stating the ability to provide water, or another form sufficient to verify the existence of an adequate water supply. ((In addition to other authorities, the county or city may impose conditions on building permits requiring connection to an existing public water system where the existing system is willing and able to provide safe and reliable potable water to the applicant with reasonable economy and efficiency.)) When an existing public water system can provide safe and reliable water to an applicant, the county or city shall require connection to that system. An application for a water right shall not be sufficient proof of an adequate water supply.

(2) Within counties not required or not choosing to plan pursuant to RCW 36.70A.040, the county and the state may mutually determine those areas in the county in which the requirements of subsection (1) of this section shall not apply. The departments of health and ecology shall coordinate on the implementation of this section. Should the county and the state fail to mutually determine those areas to be designated pursuant to this subsection, the county may petition the department of community, trade, and economic development to mediate or, if necessary, make the determination.

(3) A county, city, or town shall require an applicant for a building permit to utilize water conservation measures consistent with local ordinances, including ordinances established in accordance with regional watershed plans adopted under chapter 90.82 RCW. The conservation measures may be in addition to those required by either the department of health or the department of ecology.

(4) Buildings that do not need potable water facilities are exempt from the provisions of this section. The department of ecology, after consultation with local governments, may adopt rules to implement this section, which may recognize differences between high-growth and low-growth counties.

PART VI

CAPTURE OF SURFACE WATER BY WELLS

NEW SECTION. Sec. 601. The legislature finds that Washington's watersheds are unique and vary considerably in structure and complexity. Watershed-specific information is required to address water use, planning, and management in each watershed. In many basins the connection between ground water and surface water makes further development of the ground water resource problematic because of the risk of impairment to existing water rights, including established instream flows. A technical advisory committee convened by the department of ecology determined that, in most watersheds in the state, withdrawals of ground water will, to some extent, capture stream flow, meaning that the withdrawal or withdrawals will draw water directly from the stream or will intercept and reduce the amount of ground water discharge to the stream, or both. The committee also developed a framework for using the best available science and information to select a technical method appropriate to assess the relationship between surface and ground water for a given area. These methods can then be used to determine the effects proposed ground water withdrawals could have on existing rights, including established instream flows.

The legislature also finds that significant opportunities exist to further develop the ground water resources of the state provided that appropriate actions are taken to mitigate for any possible impairment caused by new ground water withdrawals on those existing water rights. Because most new applications for ground water rights involve withdrawals that could capture surface water, the issuance of new ground water permits is often dependent upon an applicant offsetting or mitigating the effects of those proposed withdrawals on surface water sources. Thus there is a strong need to understand the types of mitigation measures that would effectively offset the effects caused by proposed withdrawals if new ground water permits are to be issued.

The legislature further finds that the mitigation efforts should be undertaken in a manner consistent with a set of principles that promote general watershed health and the preservation and enhancement of the fishery resource, particularly in those parts of the state that contain waters in which one or more salmonid stocks are listed or proposed for listing as threatened or endangered under the federal endangered species act or listed as critical or depressed under the state salmon and steelhead stock inventory. The purpose of chapter . . ., Laws of 1999 (this act) is, in part, to establish that set of principles under which proposals to mitigate for the effects of new ground water withdrawals can be evaluated.

NEW SECTION. Sec. 602. The department of ecology shall convene a group consisting of representatives from major stakeholder groups concerned with water resources management as well as scientists recognized for their expertise in the fields of hydrology, hydrogeology, fish biology, stream ecology, and stream restoration to review, assess, and recommend methods for mitigating the effects caused by proposed ground water withdrawals. The group shall consider all types of mitigation measures. The department of ecology shall adopt rules to implement the findings of the group and shall report on the group's progress, findings, and any recommendations for possible legislative action to the legislature by December 31, 1999.

NEW SECTION. Sec. 603. A new section is added to chapter 90.03 RCW to read as follows:

(1) If the department determines that an application for a water right, transfer, or change filed under RCW 90.03.260 or 90.03.380 could impair existing rights, including instream flows, the department shall apply the following principles to evaluate any mitigation proposal included as part of the application:

(a) Preference shall be given to proposals that would replace the impaired quantity with a like amount of water, both in quantity and quality;

(b) Preference shall be given to proposals that would require a minimum of ongoing maintenance in order to be effective;

(d) Preference shall be given to coordinated mitigation proposals submitted in conjunction with a group of applications when those proposals would result in more effective mitigation, provide greater benefits to the water resource, and promote better overall watershed health. Submission of joint mitigation proposals shall not alter the priority dates of the respective applications.

(2) All proposals to mitigate potential impairments that would be created by a proposed diversion or withdrawal of water shall include a program to monitor the effectiveness of the mitigation measure.

NEW SECTION. Sec. 604. A new section is added to chapter 90.44 RCW to read as follows:

The department shall, when evaluating an application for a water right or an amendment filed under RCW 90.44.050 or 90.44.100 that it determines could impair existing rights, including instream flows, apply the principles outlined in section 603 of this act.

The department shall condition the use of water with any instream flow proviso on the water right proposed for change or any applicable instream flows contained in an adopted rule, unless the department, in consultation with the department of fish and wildlife, determines that the applicable instream flow is not sufficient using the best information available at the time the decision is made. In the absence of established instream flows, or if existing instream flows are determined by the department to be insufficient, the department shall, in consultation with the department of fish and wildlife, determine interim instream flows for conditioning the unused water to be transferred or changed. Interim instream flows shall be established that are conservative with regard to preserving instream values. Any interim instream flow placed as a proviso on an approved change under this section shall be effective until permanent instream flows are developed pursuant to a watershed planning program under chapter 90.82 RCW, or in the absence of such program, by the department of ecology under chapters 90.22 and 90.54 RCW.

Sec. 605. RCW 90.03.255 and 1997 c 360 s 2 are each amended to read as follows:

The department shall, when evaluating an application for a water right, transfer, or change filed pursuant to RCW ((~~90.03.250~~)) 90.03.260 or 90.03.380 that includes provision for any water impoundment or other resource management technique, take into consideration the benefits and costs, including environmental effects, of any water impoundment or other resource management technique that is included as a component of the application. The department's consideration shall extend to any increased water supply, or mitigation for any impairment to existing rights, that results from the impoundment or other resource management technique, including but not limited to any recharge of ground water that may occur, as a means of making water available or otherwise offsetting the impact of the diversion of surface water proposed in the application for the water right, transfer, or change. Provision for an impoundment or other resource management technique in an application shall be made solely at the discretion of the applicant and shall not otherwise be made by the department as a condition for approving an application that does not include such provision.

This section does not lessen, enlarge, or modify the rights of any riparian owner, or any existing water right acquired by appropriation or otherwise.

Sec. 606. RCW 90.44.055 and 1997 c 360 s 3 are each amended to read as follows:

The department shall, when evaluating an application for a water right or an amendment filed pursuant to RCW 90.44.050 or 90.44.100 that includes provision for any water impoundment or other resource management technique, take into consideration the benefits and costs, including environmental effects, of any water impoundment or other resource management technique that is included as a component of the application. The department's consideration shall extend to any increased water supply, or mitigation for any impairment to existing rights, that results from the impoundment or other resource management technique, including but not limited to any recharge of ground water that may occur, as a means of making water available or otherwise offsetting the impact of the withdrawal of ground water proposed in the application for the water right or amendment in the same water resource inventory area. Provision for an impoundment or other resource management technique in an application shall be made solely at the discretion of the applicant and shall not be made by the department as a condition for approving an application that does not include such provision.

This section does not lessen, enlarge, or modify the rights of any riparian owner, or any existing water right acquired by appropriation or otherwise.

PART VII

ENFORCEMENT

NEW SECTION. Sec. 701. A new section is added to chapter 39.34 RCW to read as follows:

By agreement under this chapter, the director of the department of ecology and the director of the department of fish and wildlife are each authorized to delegate and accept law enforcement powers or functions to or from the other department.

Sec. 702. RCW 75.20.106 and 1993 sp.s. c 2 s 35 are each amended to read as follows:

((The department may levy civil penalties of up to one hundred dollars per day for violation of any provisions of RCW 75.20.100 or 75.20.103. The penalty provided shall be imposed by notice in writing, either by certified mail or personal service to the person incurring the penalty, from the director or the director's designee describing the violation. Any person incurring any penalty under this chapter may appeal the same under chapter 34.05 RCW to the director. Appeals shall be filed within thirty days of receipt of notice imposing any penalty. The penalty imposed shall become due and payable thirty days after receipt of a notice imposing the penalty unless an appeal is filed. Whenever an appeal of any penalty incurred under this chapter is filed, the penalty shall become due and payable only upon completion of all review proceedings and the issuance of a final order confirming the penalty in whole or in part.

If the amount of any penalty is not paid within thirty days after it becomes due and payable the attorney general, upon the request of the director shall bring an action in the name of the state of Washington in the superior court of Thurston county or of any county in which such violator may do business, to recover such penalty. In all such actions the procedure and rules of evidence shall be the same as an ordinary civil action. All penalties recovered under this section shall be paid into the state's general fund.))

(1) If any person or government agency fails to follow the requirements of obtaining hydraulic project approval under this chapter or fails to carry out any of the requirements or conditions of a hydraulic project approval issued under this chapter, the department may issue an order to that person or government agency. The order may require the person or government agency to stop work on any or all of the activities subject to the hydraulic project approval, to correct or to restore the nonconforming site, or to both stop work and to correct or to restore the nonconforming site. Within twenty days of service of such an order or as provided by rule of the department extending such time, the person may file a written petition with the department appealing the order, and this petition shall be treated as an application for an adjudicative proceeding under chapter 34.05 RCW. In the event of an appeal, a person or government agency may seek interim relief from an order under this section as provided in chapter 34.05 RCW.

(2) The department may adopt rules to designate that certain violations of the terms or conditions of hydraulic project approval are an infraction to be punished as provided by RCW 77.15.160. Any punishment under chapter 77.15 RCW shall be supplemental to the remedy provided by subsection (1) of this section.

Sec. 703. RCW 77.15.300 and 1998 c 190 s 52 are each amended to read as follows:

(1) A person is guilty of unlawfully undertaking hydraulic project activities if the person:

(a) Constructs any form of hydraulic project or performs other work on a hydraulic project and((:

~~(a)~~)) fails to have a hydraulic project approval required under chapter 75.20 RCW for such construction or work; ((or))

(b) Violates any requirements or conditions of the hydraulic project approval for such construction or work;

(c) Violates any stop work or other order issued pursuant to RCW 75.20.106 when that order has been either served on the person or posted at the site of the violation, except when the person acts in accordance with any relief under chapter 34.05 RCW pursuant to a timely appeal or timely relief from the department order; or

(d) Violates any rule governing small scale mining adopted under RCW 75.20.330, except when such a rule violation has been designated as an infraction by rule of the department.

(2) Unlawfully undertaking hydraulic project activities is a gross misdemeanor.

NEW SECTION. Sec. 704. A new section is added to chapter 90.58 RCW to read as follows:

Whenever there are terms or conditions of the permit that are required to be completed after occupancy or use commences, or carried out as an ongoing part of occupancy or use, the local government may require the posting of a bond or other demonstration of financial responsibility as a condition of approval with regard to compliance with any one or all terms and conditions of approval. A local government may include compliance reporting requirements in any permit authorizing development under this chapter. Submittal of a report that makes false claims regarding the compliance of the project with permit requirements may be considered grounds for revocation of the permit and may be considered a separate violation of chapter 90.58 RCW.

Sec. 705. RCW 90.03.600 and 1995 c 403 s 635 are each amended to read as follows:

(1) For the purpose of this section, the "unauthorized use of water" means the use, storage, diversion, or withdrawal of any water prior to the issuance of a permit when one is required; the use of water in a manner beyond the legal entitlement of the water right claimant or holder of a water appropriation permit or certificate; or the willful waste of water.

(2) Except as provided in RCW 43.05.060 through 43.05.080 and 43.05.150, the power is granted to the department ((~~of ecology~~)) to levy civil penalties ((~~of up to one hundred dollars per day~~)) for violation of any of the provisions of this chapter and chapters 43.83B, 90.22, ((~~and~~)) 90.44, 90.54, and 90.66 RCW, and rules, permits, and similar documents and regulatory orders of the department of ecology adopted or issued pursuant to such chapters. Each and every violation is a separate and distinct offense, and in case of a continuing violation, every day's continuance shall be deemed to be a separate and distinct violation. Every act of commission or omission that results in, aids, or abets in the violation shall be considered a violation under the provisions of this section and subject to the penalty as provided for in this section.

(3) There are three categories of violations:

(a) A minor violation is a violation that does not seriously threaten public health, safety, and the environment. Minor violations include, but are not limited to, paperwork violations such as failure to provide metering records or other required water use records upon request.

(b) A serious violation is a violation that poses a critical or serious threat to public health, safety, and the environment. Serious violations include, but are not limited to, unauthorized use of water, construction of any controlling works, ditch, canal, or well prior to obtaining a required water right permit, failure to comply with the instream flow or other provision of a permit or certificate, waste of water, failure to install a metering or measuring device as required, failure to comply with a previously issued order, or repeated minor violations.

(c) A major violation is the continued unauthorized use of water after prior written notice from the department to cease.

(4) The penalty for a minor violation is not less than one hundred dollars and not more than one thousand dollars per day. The penalty for a serious violation is not less than one thousand dollars and not more than ten thousand dollars per day. The penalty for a major violation is not less than ten thousand dollars and not more than twenty-five thousand dollars per day.

(5) In determining the appropriate penalty under subsection (3) of this section, the department shall consider whether the person:

(a) Has demonstrated a general disregard for public health and safety through the number and magnitude of the violations;

(b) Has demonstrated a disregard for the water resource laws, rules, or permits in repeated or continuous violations; or

(6) Penalties provided for in this section shall be imposed under RCW 43.21B.300. The procedures of RCW 90.48.144 shall be applicable to all phases of the levying of a penalty as well as review and appeal of the same.

(7) Moneys collected under this section shall be deposited in the stream flow restoration account created in section 1005 of this act.

Sec. 706. RCW 43.21B.300 and 1993 c 387 s 23 are each amended to read as follows:

(1) Any civil penalty provided in RCW 18.104.155, 70.94.431, 70.105.080, 70.107.050, 88.46.090, 90.03.600, 90.48.144, 90.56.310, and 90.56.330 shall be imposed by a notice in writing, either by certified mail with return receipt requested or by personal service, to the person incurring the penalty from the department, the administrator of the ((~~office of marine safety~~)) integrated oil spill prevention and response program, or the local air authority, describing the violation with reasonable particularity. Within fifteen days after the notice is received, the person incurring the penalty may apply in writing to the department, the administrator, or the authority for the remission or mitigation of the penalty. Upon receipt of the application, the department, the administrator, or authority may remit or mitigate the penalty upon whatever terms the department, the administrator, or the authority in its discretion deems proper. The department or the authority may ascertain the facts regarding all such applications in such reasonable manner and under such rules as it may deem proper and shall remit or mitigate the penalty only upon a demonstration of extraordinary circumstances such as the presence of information or factors not considered in setting the original penalty.

(2) Any penalty imposed under this section may be appealed to the pollution control hearings board in accordance with this chapter if the appeal is filed with the hearings board and served on the department, the administrator, or authority thirty days after receipt by the person penalized of the notice imposing the penalty or thirty days after receipt of the notice of disposition of the application for relief from penalty.

(3) A penalty shall become due and payable on the later of:

(a) Thirty days after receipt of the notice imposing the penalty;

(b) Thirty days after receipt of the notice of disposition on application for relief from penalty, if such an application is made; or

(4) If the amount of any penalty is not paid to the department or the administrator within thirty days after it becomes due and payable, the attorney general, upon request of the department or the administrator, shall bring an action in the name of the state of Washington in the superior court of Thurston county, or of any county in which the violator does business, to recover the penalty. If the amount of the penalty is not paid to the authority within thirty days after it becomes due and payable, the authority may bring an action to recover the penalty in the superior court of the county of the authority's main office or of any county in which the violator does business. In these actions, the procedures and rules of evidence shall be the same as in an ordinary civil action.

(5) All penalties recovered shall be paid into the state treasury and credited to the general fund except those penalties imposed pursuant to RCW 18.104.155, which shall be credited to the reclamation account as provided in RCW 18.104.155(7), RCW 70.94.431, the disposition of which shall be governed by that provision, RCW 70.105.080, which shall be credited to the hazardous waste control and elimination account, created by RCW 70.105.180, ((~~and~~)) RCW 90.56.330, which shall be credited to the coastal protection fund created by RCW 90.48.390, and RCW 90.03.600, which shall be credited to the stream flow restoration account, created by section 1005 of this act.

Sec. 707. RCW 90.08.040 and 1977 c 22 s 1 are each amended to read as follows:

Where water rights of a stream or ground water source have been adjudicated a stream patrolman shall be appointed by the director of the department of ecology (1) upon application of water users having adjudicated water rights in each particular water resource making a reasonable showing of the necessity therefor((~~, which application shall have been approved by the district water master if one has been appointed,~~)); or (2) upon determination by the department at such time, for such ((~~stream~~)) water source, and for such periods of service as local conditions may indicate to be necessary to provide the most practical supervision and to secure to water users and owners the best protection in their rights. Subject to the approval of the legislative body of the affected county or counties, the department may appoint a stream patrolman for any area, regardless of whether it has been adjudicated, if required to assure proper supervision and protection of water rights, enforcement of minimum or base flows or other rules or regulations, or in response to a general decline in ground water levels.

The stream patrolman shall have the same powers as a water master appointed under RCW 90.03.060, but ((~~his~~)) the patrolman's district shall be confined to the regulation of waters of a designated ((~~stream or streams~~)) source or sources. ((~~Such~~)) The patrolman shall be under the supervision of the director or ((~~his~~)) the director's designated representative((~~. He~~)) and shall also enforce such special rules and regulations as the director may prescribe from time to time.

Sec. 708. RCW 90.08.060 and 1977 c 22 s 3 are each amended to read as follows:

The salary of the stream patrolman shall be borne by the water users receiving the benefits and shall be paid to the county or counties in the following manner:

The county or counties ((~~may~~)) shall assess each water user for ((~~his~~)) the users' proportionate share of the total stream patrolman expense in the same ratio that the amount of water diverted or withdrawn by ((~~him~~)) the user bears to the total amount diverted or withdrawn from the ((~~stream~~)) water source during each season, on an annual basis, to recover all such county expenses. The stream patrolman shall keep an accurate record of the amount of water diverted by each water user coming under ((~~his~~)) the patrolman's supervision. On the first of each month the stream patrolman shall present ((~~his~~)) the record of water diversion and withdrawal to the county or counties for the preceding month. Where the water users are organized into an irrigation district or water users' association, such organization may enter into an agreement with the county or counties for direct payment to the stream patrolman in order to minimize administrative costs.

Sec. 709. RCW 90.03.070 and 1987 c 109 s 70 are each amended to read as follows:

It shall be the duty of the water master, acting under the direction of the department, to divide in whole or in part, the water supply of ((~~his~~)) the water master's designated district among the several water conduits and reservoirs using ((~~said~~)) the supply, according to the right and priority of each, respectively. ((He)) The water master shall divide, regulate, and control the use of water within ((~~his~~)) the district by such regulation of headgates, conduits, and reservoirs as shall be necessary to prevent the use of water in excess of the amount to which the owner of the right is lawfully entitled. The regulation shall be carried out in accordance with section 710 of this act. The water master shall also enforce instream flow levels established by rule and instream flow conditions imposed on water right permits and certificates. Whenever, in the pursuance of his or her duties, the water master regulates a headgate of a water conduit or the controlling works of a reservoir, he or she shall attach to such headgate or controlling works a written notice, properly dated and signed, stating that such headgate or controlling works has been properly regulated and is wholly under his or her control and such notice shall be a legal notice to all parties. In addition to dividing the available waters and supervising the stream patrolmen in ((~~his~~)) the district, ((he)) the water master shall enforce such rules and regulations as the department shall from time to time prescribe.

The county or counties in which water master districts are created shall deputize the water masters appointed hereunder, and may without charge provide to each water master suitable office space, supplies, equipment and clerical assistance as are necessary to the water master in the performance of his or her duties.

NEW SECTION. Sec. 710. A new section is added to chapter 43.27A RCW to read as follows:

The purpose of this section is to set forth the powers of the department to regulate the withdrawal or diversion of public waters and water or water rights related thereto, including regulation based on dates of priority or other pertinent factors. Regulatory actions taken under this section shall be based on examination and determination by the department or the court, as applicable, of the various water rights involved according to the department's records and other records and pertinent facts. The powers set forth in this section may be exercised whether or not a general adjudication relating to the water rights involved has been conducted.

(1) In a regulatory situation (a) where a water right or all water rights proposed for regulation by the department, as well as any right or rights of a senior priority that the proposed regulation is designed to protect, is or are embodied in a certificate or certificates issued under RCW 90.03.240, 90.03.330, 90.38.040, 90.42.040, or 90.44.060 or a permit or permits issued under RCW 90.03.290 or 90.44.060; (b) where a flow or level has been established by rule under chapter 90.22 or 90.54 RCW; or (c) where it appears to the department that public waters are being withdrawn without any right or other appropriate authority whatsoever, the department in its discretion is authorized to regulate the right or rights under either RCW 43.27A.190 or subsection (2) of this section.

(2) In a regulatory situation where one or more of the water rights proposed for regulation by the department, as well as any right or rights of a senior priority that the proposed regulation is designed to protect, is not or are not embodied in a permit or certificate as described in subsection (1) of this section, the department, in its sole and exclusive power to regulate, is authorized to bring an appropriate action at law or in equity, including seeking injunctive relief, as it may deem necessary. Where actions are brought in a state court, the actions shall be initiated in the superior court of the county where the point or points of diversion of the water right or rights proposed for regulation are located. If the points of diversion are located in more than one county, the department may bring the action in a county where a point of diversion is located. Notwithstanding the general adjudication procedures in RCW 90.03.110 through 90.03.245 and 90.44.220, the superior court shall make findings and a determination of the validity and priority of the water rights held by the parties to resolve the regulatory situation. The superior court shall issue any necessary orders to implement its findings and determination, including injunctive relief, that it determines is necessary to regulate among the water rights.

(3) Nothing in this section authorizes the department or the superior court to accomplish a general adjudication of water rights proceeding or the substantial equivalent of a general adjudication of water rights. The exclusive procedure for accomplishing a general adjudication of water rights is under RCW 90.03.110 through 90.03.245 or 90.44.220.

(4) Nothing in this section shall amend, revise, or repeal RCW 90.14.130 or 90.14.200.

(5) This section does not in any way modify regulatory powers previously placed with the department except as provided in subsections (1) and (2) of this section.

PART VIII

LAND USE

NEW SECTION. Sec. 801. A new section is added to chapter 36.70A RCW to read as follows:

In addition to the elements required by RCW 36.70A.070, a county or city may include in its comprehensive plan an economic development element that:

(1) Promotes economic opportunity for all citizens of the county or city, especially for unemployed and disadvantaged persons and, within the capacities of the natural resources and consistent with other requirements of this chapter, encourages appropriate types of growth in areas of the city or county experiencing insufficient economic growth;

(2) Is within the capacities of the county's or city's natural resources, as determined in the land use element, including recognition of the special treatment of shorelines of the state and water-dependent uses, and its public facilities and public services, as determined in its capital facilities and utilities elements;

(3) Promotes the processing of permits in a timely and fair manner;

(4) To the extent possible, is coordinated with economic development plans and strategies of economic development councils, economic development districts, port districts, and other public and private organizations engaged in economic development planning;

(5) Encourages the reuse of underutilized or abandoned property; and

(6) Provides for monitoring and adaptation of the economic development element based on successes and failures.

NEW SECTION. Sec. 802. A new section is added to chapter 36.70A RCW to read as follows:

(1) In addition to the elements required by RCW 36.70A.070, a county or city may include in its comprehensive plan an environmental element that identifies and evaluates the environmental impacts and tradeoffs that can reasonably be foreseen by adoption and implementation of the plan.

(2) The environmental element shall address system and area-wide improvements and environmental elements and cumulative impacts, including critical areas and shorelines of the state, endangered or threatened species habitats, watersheds, water quality, ground water movement, air quality, historic and cultural resources, utilities, transportation, and public services.

(3) Environmental analysis of plan alternatives shall be conducted in the draft plan. The draft plan should present reasonable alternatives to allow comparison of the outcomes and tradeoffs in terms of impacts on the environment, levels of service, costs of implementation, and rates of growth. The final plan should summarize the outcomes and tradeoffs that were made and found acceptable in selecting the final plan.

(4) The environmental element, at a minimum, shall address the following issues for each other element of the plan:

(a) Land use element. The analysis of the land use element should clearly analyze the designations of urban growth areas and boundaries, both as to location and size, and the tradeoffs inherent in each alternative and the impacts of the preferred designation of urban growth areas and boundaries, as compared to alternates considered and the impacts of the planned growth with respect to infrastructure and capital facilities, public services, critical areas, shorelines of the state, air quality, water quality, and monitoring of development and density (land supply/use) to track the remaining land supply and capacity in urban growth areas.

(b) Housing. The analysis of this element should provide a description of the expected impacts of projected growth on the residential densities that may be required in existing residential areas, an analysis of the community's ability to provide for affordable housing needs, a program of ongoing review to monitor performance of plan implementation, and disclosure of the impacts on affordable housing that can reasonably be expected to result from the implementation of the other elements of the plan.

(c) Capital facilities. The analysis of this element should address the environmental costs of providing the established levels of services to serve projected development and growth, the consequences of projected growth and development on the established levels of service, capital facilities and improvements to existing capital facilities necessary to provide adequate public services to serve existing and projected growth and development, coordination and relationship of the capital facilities element with functional plans, such as storm water, flood plain management, service plans, comprehensive water plans, shoreline master programs, watershed management plans, options for conservation, reuse, recycling to reduce environmental and capital costs, and methods for ongoing monitoring of allocated and available capacity of capital facilities.

(d) Transportation. The analysis of this element should determine whether the plan encourages efficient multimodal transportation systems that are based on regional priorities, coordinated with county and city plans, and whether the jurisdiction can accommodate projected growth and development at established levels of service. The analysis should provide: (i) An analysis of the impacts of land use designations, population densities, and development of existing and projected growth and development on the existing transportation system; (ii) ten-year traffic forecasts based on land use decisions and projected rates of growth and development; (iii) an analysis of existing intergovernmental coordination and methods to maintain or enhance regionally coordinated levels of service; (iv) transportation demand management strategies and alternative transportation modes; and (v) a program to monitor actual use against projected use and capacity.

(e) Utilities. The analysis of this element should address the availability of service to existing and projected growth and development at established levels of service, the economic and environmental costs of providing services to existing and projected growth and development at established levels of service, conservation and other measures to reduce demand, and monitoring allocated and available capacity of utility systems.

(f) Shorelines of the state. The analysis of this element should determine whether the comprehensive plan recognizes and protects the state-wide long-term interest in shoreline management consistent with the policy and procedures of chapter 90.58 RCW.

(g) Rural. The analysis of the rural element should address land use designations, including population densities and intensity of development in the rural area and the tradeoffs made in terms of consequences to the size, location, and density of development in urban growth areas, impacts on affordable housing, impacts on local government's ability to provide services, including transportation and utilities, impacts of development on viability of long-term agricultural and forest resource lands, impacts of development on air quality, water quality, and critical areas, and impacts of residential development on ability to fight forest fires on lands adjacent to residences.

(5) The environmental element may be prepared as a separate document, as a separate element in the plan, or integrated and presented as a part of each other element of the plan.

NEW SECTION. Sec. 803. A new section is added to chapter 43.21C RCW to read as follows:

A county or city that prepares an environmental element as provided by section 802 of this act shall not be required to prepare the detailed statement required by RCW 43.21C.031 on the comprehensive plan.

PART IX

SHORELINE MANAGEMENT

Sec. 901. RCW 90.58.080 and 1995 c 347 s 305 are each amended to read as follows:

(1) Local governments shall develop or amend((~~, within twenty-four months after the adoption of guidelines as provided in RCW 90.58.060,~~)) a master program for regulation of uses of the shorelines of the state consistent with the required elements of the guidelines adopted by the department. For jurisdictions that are required to or choose to plan pursuant to RCW 36.70A.040, the master program shall be reviewed for compliance with the guidelines and adopted or amended as necessary by September 1, 2002, and at least once every five years thereafter. For all other jurisdictions, except as provided in subsection (2) of this section, the master program shall be adopted or amended within twenty-four months after the adoption of guidelines as provided in RCW 90.58.060.

(2) The department may adopt a schedule for development or amending of master programs by jurisdictions not planning pursuant to RCW 36.70A.040 that allows for a development or amendment period of more than twenty-four months, but not more than sixty months. The schedule shall be adopted as a part of the guidelines. The schedule may identify groups or classes of local government and establish different schedules for such groups or classes. Prior to adoption of a schedule, each local government shall be notified in writing of the time requirements applicable to it. The department shall give full consideration to comments made by local government on the proposed schedule based on the criteria.

PART X

FUNDING

Sec. 1001. RCW 43.99E.015 and 1990 1st ex.s. c 15 s 8 are each amended to read as follows:

For the purpose of providing funds for the planning, acquisition, construction, and improvement of water supply facilities within the state and water conservation within those facilities, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of sixty-five million dollars, or so much thereof as may be required, to finance the improvements defined in this chapter and all costs incidental thereto. These bonds shall be paid and discharged within thirty years of the date of issuance in accordance with Article VIII, section 1 of the state Constitution. No bonds authorized by this chapter may be offered for sale without prior legislative appropriation of the proceeds of the bonds to be sold.

Sec. 1002. RCW 43.99E.030 and 1996 c 320 s 21 are each amended to read as follows:

As used in this chapter, the term "water supply facilities" means domestic, municipal, industrial, and agricultural (and any associated fishery, recreational, or other beneficial use) water supply or distribution systems including but not limited to all equipment, utilities, structures, real property, and interests in and improvements on real property necessary for or incidental to the acquisition, construction, installation, or use of any such water supply or distribution system.

As used in this chapter, the term "public body" means the state of Washington or any agency, political subdivision, taxing district, local improvement district, or municipal or public corporation thereof; a board of joint control; an agency of the federal government; and those Indian tribes which may constitutionally receive grants or loans from the state of Washington.

Sec. 1003. RCW 43.83B.300 and 1988 c 47 s 1, 1988 c 46 s 2, and 1988 c 45 s 1 are each reenacted and amended to read as follows:

The legislature finds that the fundamentals of water resource policy in this state must be reviewed by the legislature to ensure that the water resources of the state are protected and fully utilized for the greatest benefit to the people of the state of Washington. The legislature further finds that it is necessary to provide the department of ecology with emergency powers to authorize withdrawals of public surface and ground waters, including dead storage within reservoirs, on a temporary basis, and construction of facilities in relation thereto, in order to alleviate emergency water supply conditions arising from the drought forecast for the state of Washington during 1977 and during 1987 through 1989.

The legislature further finds that there is a continuing water supply shortage in many areas of the state and that there is an urgent need to assure the survival of irrigated crops and of the state's fisheries.

The legislature further finds that in addition to water storage facilities or other augmentation programs, improved efficiency of water use could provide an important new supply of water in many parts of the state with which to meet future water needs and that improved efficiency of water use should receive greater emphasis in the management of the state's water resources.

The legislature further finds that it is in the interest of Washington state citizens to be better prepared for future droughts. Investments in water conservation and efficiency projects can result in conserved water that can be used to alleviate drought conditions and to conserve instream flows to benefit threatened and endangered fish species. Other benefits include improvements in water quality, public health, recreation, and habitat.

In order to study the fundamentals of water resource policy of the state and to provide needed moneys for the planning, acquisition, construction, and improvement of water supply facilities, drought preparedness, and for other appropriate measures to assure the survival of irrigated crops and/or the state's fisheries to alleviate emergency water supply conditions arising from droughts occurring from time to time in the state of Washington, and to carry out a comprehensive water use efficiency study for the state of Washington, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of eighteen million dollars, or so much thereof as may be required to finance such projects, and all costs incidental thereto. No bonds authorized by this section and RCW 43.83B.360 through 43.83B.375 shall be offered for sale without prior legislative appropriation, and these bonds shall be paid and discharged within thirty years of the date of issuance in accordance with Article VIII, section 1 of the state Constitution.

NEW SECTION. Sec. 1004. A new section is added to chapter 43.83B RCW to read as follows:

The state drought preparedness account is created in the state treasury. Six million eight hundred thousand dollars is transferred from the state emergency water projects revolving account to establish the drought preparedness account. Five hundred thousand dollars will remain in the state emergency water projects revolving account for its original purpose or purposes. Moneys in the state drought preparedness account may be spent only after appropriation. Expenditures from the state drought preparedness account may be used only for the purposes specified in section 104 of this act.

NEW SECTION. Sec. 1005. A new section is added to chapter 90.42 RCW to read as follows:

The state stream flow restoration account is created in the state treasury. All receipts from payments made under sections 104, 302, and 408 of this act, and penalties under RCW 43.21B.300 and 90.03.600 must be deposited into the account. Expenditures from the account may be used only for the department of ecology to purchase or lease water rights for placement in the trust water rights program created in this chapter and chapter 90.38 RCW. Moneys in the stream flow restoration account may be spent only after appropriation.

NEW SECTION. Sec. 1006. There is hereby appropriated to the state and local improvements revolving account‑-water supply facilities, established in RCW 43.99E.020, for the biennium ending June 30, 2001, the sum of forty-three million dollars from funds appropriated by the United States to the state of Washington to be divided into two shares as follows:

(1) Twenty-one million five hundred thousand dollars, or as much thereof as may be necessary, shall be expended by the department of ecology for agricultural water supply conservation and efficiency improvement projects. These funds shall be provided to qualifying public bodies as grants and loans.

(2) Twenty-one million five hundred thousand dollars, or as much thereof as may be necessary, shall be expended by the department of health for domestic and municipal water supply conservation and efficiency improvement projects. These funds shall be provided to qualifying public bodies as grants and loans.

NEW SECTION. Sec. 1007. A new section is added to chapter 90.42 RCW to read as follows:

Conserved water resulting from projects funded under section 1006 of this act shall be allocated in accordance with section 302 of this act.

NEW SECTION. Sec. 1008. Part headings used in this act are not any part of the law.